ANALYZING THE INFLUENCE OF RETURN ON ASSETS (ROA), RETURN ON EQUITY (ROE), AND EARNINGS PER SHARE (EPS) TOWARDS SHARE PRICE ON INDONESIAN COMPANIES LISTED IN TOP 50 HIGHEST ASEAN CORPORATE GOVERNANCE SCORECARD DURING 2013-2014 PERIOD

Abstract

Share is considered as one investment are that quite interesting yet followed by high risk as well. Basically, the interest from investor is reflected by the share price. If a demand to a share is high, then the price of the share is tend to be high as well. Companies that could generate a high profit, will increase the gain for every investor which is reflected upon the share price. As the indicator of company‟s performance, profitability probably affects the share price of the company. Concerning about that, the researcher studied if there is any effect of profitability (return on assets, return on equity and earnings per share) to the share price. The research is a study on top 50 companies listed in ASEAN Corporate Governance Scorecard for period 2013-2014. In choosing the samples, the researcher used purposive sampling based on some criteria. The independent variables are return on asset, return on equity and earnings per share. Meanwhile the dependent variable is share price. The model of regression used to test the hypothesis is multiple linear regressions with significance level of 5%. The result of t-test is that return on asset‟s significance level is 0.005 which is lower than 0.05, therefore return on asset statistically gives significance influence to the share price. So does the earnings per share which has 0.000 of significance level. On the other hand, return on equity has no statistically significance influence to the share price since its significance level is 0.229. The coefficient of return on asset and earnings per share are 0.258 and 0.682 which means it has positive effect to share price, meanwhile the coefficient of return on equity is -1.211 which means that it has negative effect to share price. Therefore both return on asset and earnings per share have positive effect to the share price, and return on equity has negative effect to share price. The results of F-test is 0.000, because it is less than the significance level of 0.05, it can be concluded that the independent variables simultaneously, or at least one of them affect the share price as the dependent variable. The coefficient of determination (R2) analysis results is 0.685. Meaning return on asset, return on equity and earnings per share explain 68.5% variation of share price. The rest of 21.5% is explained by the other variables that are not included in this research.