THE INFLUENCE OF FINANCIAL PERFORMANCE TOWARD PRICE EARNINGS RATIO IN CONSUMER GOODS INDUSTRY SECTOR IN INDONESIA

Abstract

This research examines factor influencing of liquidity, profitability, activity ratio, earnings per share and firm size toward price earnings ratio of consumer goods industry sector during period 2010-2017. This research used quantitative method with purposive sampling and panel data that obtained from Indonesia Stock Exchange and company official website. This research has 64 observations from eight companies in eight year annually. Classical assumption test was conducted to make sure the data obtained will lead to a valid result. This research is analyzed by using multiple regression analysis and adopts the fixed effect model. The empirical evidence of the research is indicates current ratio, inventory turnover, return on equity, and firm size has partially positive significant influence toward price earnings ratio, while earnings per share has negative significant influence towards price earnings ratio. Simultaneously, those independent variables are influence the price earnings ratio by 56.5512% and the rest 43.4488% is influenced by other variables which are not examined by this research.