ANALYSIS OF THE EFFECT OF PROFITABILITY RATIOS ON COMPANY STOCK PRICES WITH EPS AS AN CONTROL VARIABLE

Abstract

ABSTRACT

The capital market is a means of business financing where companies obtain capital from investors. The main goal of investors in buying shares is to obtain dividends from the difference between the selling price and the buying price of the shares. The share price is the price per share of a company's shares issued on the stock exchange. Share prices are determined by supply and demand for the shares themselves. The more people buy shares, the share price tends to move up and conversely, the more people sell their shares, the share price tends to move down. Prospective investors should understand fundamental analysis as an additional material in looking at financial ratios, learn to invest well, learn to assess stock portfolios so that they suit the investor's characteristics. This research aims to determine the effect of Net Profit Margin (NPM), Return on Equity (ROE), and Return on Assets (ROA) on share prices with earnings per share (EPS) as the control variable. Data for this research was obtained from secondary data using a purposive sampling method. The samples used were 11 companies listed on the Indonesian Stock Exchange (BEI) manufacturing companies in the pharmaceutical subsector in 2019-2023. The analytical tool used is t test regression analysis with SPSS application tools. The results of this research show that Net Profit Margin (NPM) has a positive effect on stock prices. The test results on Return on Assets (ROA) have a positif effect on stock prices. The test results on the variables Earning Per Shares (EPS) and Net Profit Margin (NPM) have a positive effect on share prices. While the ROE ratio does not affect the company's stock price. Meanwhile, for the simultaneous test, the ROA, ROE, NPM and EPS ratios together influence the stock prices of pharmaceutical companies.

Keywords: ROA, ROE, NPM, EPS, and Stock Price