THE EFFECT OF CURRENT RATIO, DEBT TO EQUITY RATIO, AND EARNING PER SHARE TOWARDS COMPANY’S STOCK PRICE IN LQ45 INDEX LISTED ON IDX(2008-2011)

Abstract

A number of relevant information is required by investors who are interested in investing their funds in a capital market, especially in the form of stocks. This information could be obtained through fundamental financial performance that comes from financial ratio of companies. This research is aimed to determine whether financial ratio such as CR, DER, and EPS have significant effect to the company’s stock price in LQ45 Index listed on Indonesia Stock Exchange during 2008-2011.The samples used for this research is taken from 20 companies listed on LQ45 Index that have large capitalization and liquidity in Indonesia Stock Exchange (IDX). Variables of the study include CR, DER and EPS as independence variables and stock price as dependence variable. The data used for this research is the latest four years started from 2008 until 2011. The samples were taken in yearly basis which means 80 samples for each variable. For analyzed the variables, multiple regression method was selected.by using multiple regression analysis, this study provided evidence that the value of coefficient determination is 78.9%. It means 78.9% of the variation in stock price can be explained by the variation of independence variables (CR, DER and EPS). F test indicated that CR, DER and EPS have significant effect towards stock price in LQ45 companies collectively. While partially basis, the independence variable that has significant effect towards stock price is just EPS in positive sign.