The effect of financial performance on stock return in mining sector companies listed on IDX

Inggriyani Wilda Utami, Titis Puspitanigrum Dewi Kartika

Abstract


In Indonesia mining sector companies are an attractive sector to invest in stocks, because, from a geographical perspective, Indonesia is an archipelagic country which naturally contains many mining products. This study attempts to find out the effect of financial performance on stock returns. The statistical method used in this study is multiple linear regression analysis, using the sample of public mining companies that publish audited financial statements. The research period is 2013-2017 by involving 84 data to be processed consisting of 28 companies every year. The results showed that debt policy and company value have a significant effect on stock returns, while firm size and investment cash flow have no significant influence on stock returns. Investors will be more interested in investing in companies that have good financial performance than in companies that have poor financial performance. This research is important to do because unsystematic risks can be avoided by knowing and analysing the company's financial performance, such as the influence of debt policy, company value, company size, and investment cash flow on stock returns in mining sector companies listed on the Indonesia Stock Exchange.


Keywords


Debt Policy, Company Value, Company Size, Investment Cash Flow, Stock Returns



DOI: http://dx.doi.org/10.14414/tiar.v9i1.1705

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