Companies Financial Performance as a Signal for Investor in Predicting Stock Price, with Macroeconomics Variable as Control Variable

Abstract

The purpose of this research is to measure and to analyze the impact of financial ratios to companies' stock price, while using macroeconomics variable as control variable. The financial ratios used in this research are: price earnings ratio, price to book value, net profit margin and return on equity. The samples of this research are stock price of 25 companies in consumption and financial sectors in Indonesia stock market during period 2009 to 2016, therefore there are 200 panel balance observation. Using Fixed Effect Model, result of the research shows that companies' financial ratios have strong influence on stock price. Test of hypotheses showed that together all financial ratios have significant impact on stock price. However, partially, only price earnings ratio and price to book value have significant impact on stock price.