THE EFFECT OF FINANCIAL LEVERAGE AND PROFITABILITY RATIO ON EARNING PER SHARE (STUDY IN LQ45 COMPANIES REGISTERED IN INDONESIA STOCK EXCHANGE PERIOD OF YEAR 2011 - 2013)

Abstract

This research have purpose to analyze the influence of financial leverage and profitability ratio on earning per share in LQ45 companies registered in Indonesia Stock Exchange period of year 2011 -2013. The data is taken from www.idx.co.id and consist of 19 companies. Purposive sampling method was used as samples selection method. This research used multiple regression method and classical assumption tests such as normality test, autocorrelation test, multicollinearity test, and heteroscedasticity test. Meanwhile, the method of testis the hyphotesis is using t-test and f-test. By using Statistical Package Social Sciences (SPSS) version 2.0, the research findings showed that simultaneously, Financial Leverage, and profitability ratio statistical significantly affect earning Per Share. Partially, profitability ratio gives positive influence to Earning per share, while financial leverage gives negative influence to earnign per share The coefficient determinant (R2) is 0.093 which means 9.3% of earning per share variation is explained by independent variables above, whereas 90.7% explained by another variables which is not followed.