Analyzing Accounting Ratios as Determinants of the LQ45 Stock Prices Movements in Indonesia Stock Exchange During the Period of 2002-2006
Keywords:book value per share, current ratio, dividend payout ratio, earnings per share (EPS), fundamental analysis, LQ-45, return on assets (ROA), stock dividends, and technical analysis.
AbstractThe lack of studies regarding the determinants of stock price movement in the Indonesia Stock Exchange (ISX), which is an emerging stock exchange in the South East Asia region, and the pursue of generalization became the reasons of why this study. Previous research (Gupta, Chevalier, & Sayekt, 2000; Subiyantoro & Andreani, 2003), mostly focus on the external factors of the firms, instead of the internal factors. This study uses the accounting ratios as the determinants of the prices of stocks’ classified as the LQ45 in the ISX during 2002-2006. The panel-data regression model is used to test whether all of the independent variables involved in the equation could simultaneously explain the behavior of the dependent one. The developed model would be analyzed by the utilization of econometrics package, namely GRETL 1.7.4. After conducting some statistical treatments on the developed model, this study reveals that the shareholders’ ratios consisted of book value per share, dividend payout ratio, EPS, and ROA are the accounting ratios, which determine the LQ45’s stock price movement in the ISX during the period of 2002-2006.
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