Vol. 5, No. 8, August 2024
E-ISSN: 2723-6692
P-ISSN: 2723-6595
http://jiss.publikasiindonesia.id/
Jurnal Indonesia Sosial Sains, Vol. 5, No. 8, August 2024 1955
KEYWORDS
ABSTRACT
Current Ratio; Debt to Equity
Ratio; Return on Asset; Stock
Prices
This research aims to analyze the impact of the CR, DER and ROA on
stock prices of companies in the property and real estate sector
listed on the IDX during the 2018-2023 period. The data used in this
research were collected through documentation methods by
accessing the companies' annual financial reports published on the
Indonesia Stock Exchange. Using multiple linear regression analysis,
the study found that the current ratio and debt-to-equity ratio do not
have a significant impact on stock prices. On the other hand, return
on assets was found to have a significant impact on stock prices. The
results of this study indicate that investors pay more attention to the
profitability of companies, as reflected in the return on assets, rather
than liquidity or capital structure when determining stock values in
the property and real estate sector.
Attribution-ShareAlike 4.0 International (CC BY-SA 4.0)
1. Introduction
The property and real estate segment is one of the vital segments in a country's economy,
including Indonesia. This division incorporates a broad range of exercises related to the possession,
improvement, and administration of property, such as arriving, buildings, and framework. The
industry has an vital part in giving lodging, commercial space, and framework required by the
community. Inquire about by LPEM FEB College of Indonesia appears that the property, genuine
domain, and building development divisions made a noteworthy commitment to the national Net
Household Item (GDP) within the 2018-2022 period, which is around Rp 2,349 trillion to Rp 2,865
trillion per year, proportionate to 14.63-16.3 percent of the full national GDP (Grahadyarini, 2023).
In a press conference in Jakarta on September 19, 2023, the Planning Serve for Economic Affairs of
the Republic of Indonesia, Airlangga Hartarto, expressed that within the moment quarter of 2023, the
property industry contributed 9.43% to the development sector and 2.40% to the genuine bequest
segment to national GDP. The number of companies within the property and real estate domain
segment recorded on the IDX counting the most board category in 2023 is 33 companies.
Effect of Current Ratio, Debt to Equity Ratio, and Return on
Assets on Stock Prices of Property and Real Estate Companies on
the Indonesia Stock Exchange (2018-2023)
Gina Ismatul Asna, Erna Herlinawati
Universitas Indonesia Membangun, Bandung, Indonesia
Email: ginaasna@student.inaba.ac.id, rna.h[email protected].id
Correspondence: ginaasna@student.inaba.ac.id
*
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Jurnal Indonesia Sosial Sains, Vol. 5, No. 8, August 2024 1956
Venture within the property and genuine domain division is one of the alluring segments for
financial specialists, both residential and outside. Speculations in this industry not as it were give
alluring potential returns but too play an imperative part in driving national financial development
and making employments. Be that as it may, the marvel of stock cost changes within the current
capital advertise frequently happens. Fluctuating levels of request and supply can affect stock price
changes.
The stock cost could be esteem shaped from the flow of supply and request within the stock
advertise; as a rule, the closing cost of the stock advertise amid a certain perception period for each
stock tested, which is at that point taken note by financial specialists (Wilyaka & Pujiarti, 2022). The
stock costs of property and real estate domain companies can, moreover, carry a tall level of chance
and be vulnerable to eccentric showcase changes. Figure 1 is the stock cost information of the
property and genuine bequest segment for the period July 2018-March 2024.
Figure 1 Property and Real Estate Sector Stock Prices
Source: https://www.Idx.co.id
Based on Figure 1, in 2019, the share price of the property sector experienced a high increase
of 22.9%. However, during the Covid-19 outbreak and post-pandemic, the property sector
experienced a decline for three consecutive years (2020-2022). In 2023, the property sector began to
show signs of recovery with an increase of 0.4%, but again declined by 7% in the first quarter of 2024.
Therefore, to predict the future movement of the property industry, investors must first grasp the
elements that influence its actual performance.
Investors typically begin their choice of investment by assessing the company's ability to
manage its assets profitably. Investors will assess the company's performance as an initial step.
Sukayasih et al. (2019) stated that one of the determining factors in stock price is the firm's
performance. This analysis aims to obtain accurate information about companies that are expected
to have optimal performance so that they can provide profits for investors in the next period.
Financial statements and yearly reports can be analyzed to assess the company's success. Financial
statements provide insights into the company's financial situation and serve as a decision-making
tool. Financial statement analysis is required to analyze management's achievements in recent times
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Jurnal Indonesia Sosial Sains, Vol. 5, No. 8, August 2024 1957
and is a considering in preparing the business’s future. One of the most common analyses of financial
statements is the analysis of financial ratios such as profitability ratio, solvency ratio, and liquidity
ratio.
Table 1 Stock Price Data, CR, DER, and ROA on Property and Real Estate Sector Companies
Listed on the IDX in 2022-2023
Company Name
Code
Year
Share
Price
(Rp)
Current
Ratio
(%)
Debt to
Equity
Ratio (%)
Return
on Asset
(%)
Agung Podomoro
Land Tbk.
APLN
2022
154
195,80
67,90
7,80
2023
129
130,10
110,60
4,10
Bekasi Asri
Pemula
BAPA
2022
95
358,00
5,00
-3,00
2023
67
271,00
7,00
-2,00
Bumi Citra
Permai Tbk.
BCIP
2022
68
450,00
90,00
1,93
2023
60
450,00
90,00
1,90
Bhuwanatala
Indah Permai
Tbk.
BIPP
2022
51
231,38
74,53
-0,04
2023
50
198,03
84,67
-2,31
Natura City
Developments
Tbk.
CITY
2022
142
1173,00
9,28
-2,28
2023
63
768,00
13,42
0,20
Duta Agganda
Realty Tbk.
DART
2022
172
10,00
167,50
-6,50
2023
128
20,00
199,40
-5,40
Trimitra
Propertindo Tbk.
LAND
2022
50
96,10
56,00
-1,10
2023
15
88,10
62,00
-1,60
Modernland
Realty Tbk
MDLN
2022
82
80,00
146,00
0,15
2023
62
88,00
155,00
-0,77
Summarecon
Agung Tbk
SMRA
2022
605
150,00
50,00
2,70
2023
575
132,00
59,00
3,30
Indonesia Prima
Property Tbk
OMRE
2022
810
45,26
26,17
-5,91
2023
498
28,11
11,42
-4,09
Source: www.idx.com processed data, 2024
Based on Table 1, it can be seen that the share prices of 10 (ten) companies in the property and
real estate sector fluctuated every year from 2018 to 2023, wherein 2023, all companies experienced
a decline in stock prices allegedly caused by a decrease in the Current Ratio (CR), an increase in the
Debt to Equity Ratio (DER), and a decrease in Return on Asset (ROA).
The CR is a ratio used to analyze a company's capacity to meet its short-term liabilities or debts
that would shortly mature when charged in all (Mayasari et al., 2024). Sumarsan (2021) states that a
higher CR implies a more significant capability to satisfy short-term liabilities, while a lower ratio
shows a lesser ability. This can result in a reduction in the company's stock price. The industry
standard ratio for the CR is 200% or 2 times; if it is more than 200% or 2 times, then the better it is,
and if it is less than 200% or 2 times, then it is said to be wrong (Dewi & Dana, 2017).
Table 1 shows that companies in the Property and Real Estate sector have experienced a
decrease in current ratio in 2023; in addition to experiencing a decline, there are 5 (five) companies
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Jurnal Indonesia Sosial Sains, Vol. 5, No. 8, August 2024 1958
with current ratios below standard or 200%, namely Agung Podomoro Land Tbk, Bhuwanatala Indah
Permain Tbk, Trimitra Properindo, Tbk, Summarecon Agung Tbk, and Indonesia Prima Property Tbk.
Meanwhile, Duta Anggada Realty Tbk and Modernland Realty Tbk have experienced an increase in
the current ratio in 2023. However, these figures are far below the standard of only 20% and 88%,
respectively. This contradicts Sumarsan (2021) theory and research (Mayasari et al., 2024), which
suggest that the CR has a beneficial effect on stock prices, with rising current ratios resulting in higher
stock prices. In contrary to Verawati et al.'s (2024) findings, which suggested that the CR had a
negative impact on stock prices, stock prices rise when the current ratio falls. Meanwhile, Aryani et
al. (2024) concluded that the CR has no substantial effect on stock prices.
Debt to Equity Ratio (DER) is a measure that determines the proportion of debt to equity by
comparing total debt to equity. This ratio determines the ratio between funds borrowed from
creditors and capital provided by company owners (Oktawianto & Laksmiwati, 2023). The higher the
DER, the greater the danger to the company. This makes investors view the company as high-risk, and
they tend to avoid purchasing shares in companies with a high DER. As a result, the greater the DER,
the lower the company's stock price, and vice versa (Liza et al., 2022). Sukamulja (2019) states that
the ideal DER value is below 1 or less than 100%. Table 1 shows that several companies experienced
an increase in the DER figure in 2023. This indicates poor management of the company's capital
structure and increased risk to the company. Furthermore, in Table 1, it can be seen that the company
Bumi Citra Permai Tbk has not experienced a change in DER, but this company has experienced a
decrease in the share price. This is not by the theory put forward by Liza et al. (2022) and previous
findings by Ristiya et al. (2024), which stated that the Debt Equity Ratio significantly influences stock
prices. However, this statement contradicts the findings by Aryani et al. (2024).
The Return on Asset Ratio (ROA) is a metric that determines how efficiently a company
generates money from its assets. This ratio demonstrates the ability of firm management to manage
assets and make profits (Shiddigie & Priyanto, 2021). This ratio is a profitability indicator that measures
how much net profit is obtained from using a company's assets (Lestari et al., 2023). According to
Kasmir (2019), the ROA that are considered good and healthy for a company are the ones that reach
a positive number and are above 5.98%. In Table 1, it can be seen that there is a decrease in ROA in
several companies In addition, 5 (five) companies in 2023 had ROA figures below the standard, they
even reached negative numbers and make the company's share price decreased. This is not according
to the theory put forward by Kasmir (2019), which states that "High Return On Asset will provide an
indication of a good company's prospects and can trigger investors to increase demand for shares so
that stock prices increase." This aligns with Fazriati and Herlinawati's (2024). Meanwhile, Verawati et
al. (2024) stated that ROA does not significantly affect stock prices.
The purpose of this paper is to find out and analyze the influence of Current Ratio (CR), Debt to
Equity Ratio (DER), and Return on Assets (ROA) on the share price of companies in the property and
real estate sectors listed on the Indonesia Stock Exchange during the 2018-2023 period.
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Jurnal Indonesia Sosial Sains, Vol. 5, No. 8, August 2024 1959
2. Materials and Methods
The research method used in this study is quantitative with a descriptive and 2 verifiable
approach. This approach is utilized to describe and evaluate CR, DER, ROA on Share Price in Property
and Real Estate companies during 2018-2023.
This study's data collection technique uses a documentation method, using data derived from
existing documents. The population used in this study is all 37 Property and Real Estate companies
listed on the IDX in 2018-2023. The sampling technique used in this study is purposive sampling.
Some of the criteria for obtaining samples using purposive sampling are shown in the table.
Table 2 Sample Criteria
No
Sample Criteria
Total
1
Companies included in the Property and real estate sectors that
are listed consecutively on the IDX during the 2018-2023 period
37
2
Companies that contain complete financial statements for the
2018-2023 period
33
3
Companies that did not experience a decline in stock prices in
2023
(16)
4
Companies that have financial statements with declining stock
prices and unhealthy CR, DER ROA in 2023
10
Total of Companies Used as Samples
10
Observation Year 2018-2023
6 Years
Total Sample Units
60
Based on the sampling criteria using the purposive sampling method, 10 companies from the
Property and Real Estate sector were selected that met the specified criteria. The data analysis
techniques employed in this study consist of descriptive analysis and verifiable analysis. The testing
process will be conducted with the assistance of the Eviews 13 software.
3. Result and Discussion
Descriptive Analysis
Table 3 Results of Descriptive Analysis
Y_HARGA_SAHAM
X1_CR
X2_DER
X3_ROA
Mean
288.3833
287.5045
69.24333
-0.115333
Median
128.5000
143.5000
76.29500
0.035000
Maximum
1790.000
2488.000
199.4000
9.530000
Minimum
15.00000
10.00000
5.000000
-11.88000
Std. Dev.
351.3341
414.5756
47.33705
3.778771
Observations
60
60
60
60
Table 3 shows that the average value (mean) of the Stock Price is 2888.3833 with a standard
deviation of 351.3341 shows that the data is not well distributed due to the level of deviation greater
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Jurnal Indonesia Sosial Sains, Vol. 5, No. 8, August 2024 1960
than the average value. In this case, it indicates that share prices in the Property and Real Estate sector
have fluctuated considerably, reflecting instability and uncertainty in the market. The highest
(maximum) value of 1790 was owned by Indonesia Prima Property Tbk in 2018, while the lowest
value (minimum) of 15 was owned by Trimitra Propertindo Tbk in 2023.
The mean value of the CR is 287.50% with a standard deviation of 414.58%, indicating that the
data is not well distributed due to a deviation greater than the average value. The highest value
(maximum) is 2488% owned by Bekasi Asri Pemula Tbk in 2019, while the lowest value (minimum)
is 10% owned by Duta Anggada Realty Tbk in 2021 and 2022. A good standard value for the Current
Ratio is 200% or above, indicating that the company is in good condition in meeting its short-term
obligations, and the average for Property and Real Estate companies is 287.50, reflecting a positive
condition as it is above 200%.
The mean value of the is 69.24% with a standard deviation of 47.34%, suggesting that the data
is well dispersed because the level of deviation is less than the average value. The highest value
(maximum) is 199.40% owned by Duta Anggada Realty Tbk in 2023, while the lowest value
(minimum) is 5% owned by Bekasi Asri Pemula Tbk in 2021 and 2022. A good standard value for
Debt Equity Ratio is below 1 or below 100%, indicating good company fundamentals, and the average
for Property and Real Estate companies is 69.24%, reflecting a positive condition as it is below 100%.
The mean value of ROA is -0.11% with a standard deviation of 3.77%, indicating that the data
is not well distributed due to a deviation rate greater than the average value. The highest value
(maximum) is 9.53% owned by Natura City Developments Tbk, while the lowest value (minimum) is
-11.88% owned by Modernland Realty Tbk. A good standard value for Return on Assets is to achieve
a positive number. It is above 5.98%, while the average ROA of property and real estate companies is
-0.11%, which indicates poor conditions because the value is below standard.
Model Selection Test
Panel data regression can be performed using three analysis models: common effect, fixed
effect, and random effect. The analysis model selection is dependent on meeting the necessary
statistical data processing requirements so that the outcomes may be statistically accounted for. As a
result, the first step is to select the appropriate model among the three available. The Chow Test and
the Hausman Test were used to select the best appropriate estimating model.
Chow Test
The Chow test determines whether a standard or fixed effect model is more suitable for
estimating panel data. The hypotheses in the Chow Test are as follows:
a. If the probability of chi-square < 0.05, then the model chosen is a fixed effect model.
b. If the probability of chi-square > 0.05, the chosen model is a standard effect model.
Table 4 Chow Test Results
Redundant Fixed Effects Tests
Equation: Untitled
Test cross-section fixed effects
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Jurnal Indonesia Sosial Sains, Vol. 5, No. 8, August 2024 1961
Effects Test
Statistic
d.f.
Prob.
Cross-section F
9.915134
(9,47)
0.0000
Cross-section Chi-square
63.854554
9
0.0000
Table 4 shows that the probability of chi-square is 0.0000, meaning it is less than 0.05,
according to the Chow Test hypothesis criteria chosen, namely the fixed model.
The Hausman Test
The Hausman test determines whether a fixed or random effect model will be used. The
hypotheses in the Hausman Test are as follows:
a. If the probability of cross-section < 0.05, then the model chosen is a fixed effect model.
b. If the probability of cross-section > 0.05, then the model chosen is a random effect model.
Table 5 Hausman Test Results
Correlated Random Effects - Hausman Test
Equation: Untitled
Test cross-section random effects
Test Summary
Chi-Sq.
Statistic
Chi-Sq. d.f.
Prob.
Cross-section random
12.061692
3
0.0072
Table 5 shows that the cross-section probability is 0.0072, which means it is less than 0.05. By
the hypothesis criteria of the Hausman Test, the model chosen is a fixed effect model. Therefore, based
on the results of selecting the panel data regression model with the Chow Test and the Hausman Test,
the two tests showed the same results, namely choosing a fixed effect model. Therefore, in this study,
the fixed effect model will be used to assess the regression test of panel data in research decision-
making.
Classical Assumption Test
1.
Normality Test
The normality test in this study uses the Jarque-Bera test. If the significance level > alpha 5%,
then the data is distributed normally, vice versa.
Table 4 Results of the Normality Test
0
1
2
3
4
5
6
7
8
9
-10 -8 -6 -4 -2 0 2 4 6 8 10 12
Series: Standardized Residuals
Sample 2018 2023
Obs ervations 60
Mea n -1.18e-16
Media n 0.155171
Maximum 12.97597
Mini mum -9.776016
Std. Dev. 4.026056
Skewness 0.233073
Kurtos is 4.431478
Jarque-Bera 5.666053
Probabili ty 0.058835
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Jurnal Indonesia Sosial Sains, Vol. 5, No. 8, August 2024 1962
Table 4 shows that the Jarque-Bera value is 5.666053 with a probability value greater than α
(0.058835 > 0.05). These results indicate that the distributed data is normal. The normal distribution
of the data is achieved after data transformation using natural logarithms (logs).
2.
Multicollinearity Test
Table 5 Multicollinearity Test Results
X1_CR
X2_DER
X3_ROA
X1_CR
1.000000
-0.490681
0.255157
X2_DER
-0.490681
1.000000
-0.210903
X3_ROA
0.255157
-0.210903
1.000000
Table 5 shows that all correlation values between independent variables do not have a value of
more than 0.80, meaning that in this regression model, there is no multicollinearity.
3.
Heteroscedasticity Test,
The White test was carried out to test heteroscedasticity. If the probability of Obs*R-squared is less
than 5% (alpha), then the data indicates heteroscedasticity, and vice versa (Winarno, 2017).
Table 6 Heteroscedasticity Test Results
Variable
Coefficien
t
Std. Error
t-Statistic
Prob.
C
168.8887
60.50770
2.791193
0.0076
X1_CR
0.024932
0.052914
0.471173
0.6397
X2_DER
-
0.785249
0.796873
-0.985414
0.3295
X3_ROA
9.107774
5.316385
1.713152
0.0933
Based on Table 6, it can be seen that the data shows that the probability value of each variable
is more than 5%, namely CR of 0.6397, DER of 0.3295 and ROA of 0.0933. So it can be concluded that
in this model there is no heterokedasticity.
4.
Autocorrelation Test
Regression models are said to be free from autocorrelation if they have a Durbin-Watson value
between -2 and +2 (Santoso, 2010).
Table 7 Autocorrelation Test Results
R-squared
0.728274
Mean dependent var
288.3833
Adjusted R-squared
0.658897
S.D. dependent var
351.3341
S.E. of regression
205.1932
Akaike info criterion
13.67492
Sum squared resid
1978900.
Schwarz criterion
14.12869
Log likelihood
-
397.2475
Hannan-Quinn criter.
13.85241
F-statistic
10.49736
Durbin-Watson stat
1.320747
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Jurnal Indonesia Sosial Sains, Vol. 5, No. 8, August 2024 1963
Prob(F-statistic)
0.000000
Table 7 reveals that the Durbin-Watson value is 1.230747, which ranges from -2 to +2. This implies
that the regression model in this investigation has no autocorrelation.
Multiple Regression Analysis
Table 8 Multiple Regression Analysis Test Results
Variable
Coefficien
t
Std. Error
t-Statistic
Prob.
C
371.5902
108.6351
3.420536
0.0013
X1_CR
0.003569
0.095001
0.037566
0.9702
X2_DER
-
1.161909
1.430700
-0.812127
0.4208
X3_ROA
32.76094
9.544999
3.432262
0.0013
Effects Specification
Cross-section fixed (dummy variables)
R-squared
0.728274
Mean dependent var
288.3833
Adjusted R-squared
0.658897
S.D. dependent var
351.3341
S.E. of regression
205.1932
Akaike info criterion
13.67492
Sum squared resid
1978900.
Schwarz criterion
14.12869
Log likelihood
-
397.2475
Hannan-Quinn criter.
13.85241
F-statistic
10.49736
Durbin-Watson stat
1.320747
Prob(F-statistic)
0.000000
Based on Table 8, the values of constants and regression coefficients are derived, allowing for the
formation of the following regression equation:
Y = 371.5902 + 0.003569 X1 - 1.161909 X2 + 32.76094 X3
The above equation can be interpreted as follows:
1. The constant (α) of 371.5902 indicates that if the CR, DER, and ROA are valued at 0 or no change,
then the Stock Price will be worth 371.5902 units.
2. The value of the CR (X1) variable has a regression coefficient of 0.003569, meaning that if CR
increases by one unit. At the same time, DER and ROA are constant, and the stock price increases
by 0.003569 units.
3. The value of the DER (X2) variable has a regression coefficient of -1.161909, meaning that if the
DER increases by one unit while the CR and ROA are constant, the Stock Price decreases by
1.161909 units.
4. The value of the ROA (X3) variable has a regression coefficient of 32.76094, meaning that if the
ROA increases by one unit while the CR and DER are constant, the Stock Price increases by
32.76094 units.
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Jurnal Indonesia Sosial Sains, Vol. 5, No. 8, August 2024 1964
Multiple Correlation Coefficient Analysis
Table 9 Multiple Correlation Coefficient Test Results,
Cross-section fixed (dummy variables)
R = 0.853389
R-squared
0.728274
Mean dependent var
288.3833
Adjusted R-squared
0.658897
S.D. dependent var
351.3341
S.E. of regression
205.1932
Akaike info criterion
13.67492
Sum squared resid
1978900.
Schwarz criterion
14.12869
Log-likelihood
-
397.2475
Hannan-Quinn criter.
13.85241
F-statistic
10.49736
Durbin-Watson stat
1.320747
Prob(F-statistic)
0.000000
Based on Table 9, the relationship between the CR, DER, and ROA with the Stock Price is
0.853389. According to the correlation criteria table, this value falls within the range of 0.80-1.00,
which indicates a strong and unidirectional relationship. Since the results are positive, it can be
concluded that any increase in CR, DER, and ROA will increase the Stock Price.
Determination Coefficient Analysis
The analysis results show that the value of R square (R²) is 0.728274. This figure indicates that
together, the variables CR, DER, and ROA contribute 72.82% to the Stock Price variable. The rest,
namely 27.18%, was influenced by other variables that were not investigated in this study.
Hypothesis Testing,
Table 10 T Test Results
Variable
Coefficie
nt
Std. Error
t-Statistic
Prob.
C
371.5902
108.6351
3.420536
0.0013
X1_CR
0.003569
0.095001
0.037566
0.9702
X2_DER
-
1.161909
1.430700
-0.812127
0.4208
X3_ROA
32.76094
9.544999
3.432262
0.0013
Based on Table 10 with a significance level of α = 0.05, the hypothesis testing decision is as
follows:
1. Testing the Hypothesis of the Effect of CR on Stock Price: With a probability value of 0.9702
and a t-value of 0.0950, CR's effect on stock price is insignificant, as both values do not meet
the criteria for a significant influence (probability > 0.05 and t-value < 1.6725). Thus, H0 is
accepted, and H1 is rejected.
2. Testing the Hypothesis of the Effect of DER on Stock Prices: DER also shows no significant
effect on stock price, with a probability value of 0.4208 and a t-value of -0.812127. These
values do not support a significant influence, leading to the acceptance of H0 and rejection of
H2.
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Jurnal Indonesia Sosial Sains, Vol. 5, No. 8, August 2024 1965
3. Testing the Hypothesis of the Effect of ROA on Stock Prices: ROA significantly influences stock
price, with a probability value of 0.0013 and a t-value of 9.5449. Both values exceed the
significance threshold (probability < 0.05 and t-value > 1.6725), resulting in the rejection of
H0 and acceptance of H3.
Testing of F-Test Hypothesis
Table 11 Test Results F
Cross-section fixed (dummy variables)
R-squared
0.728274
Mean dependent var
288.3833
Adjusted R-squared
0.658897
S.D. dependent var
351.3341
S.E. of regression
205.1932
Akaike info criterion
13.67492
Sum squared resid
1978900.
Schwarz criterion
14.12869
Log-likelihood
-
397.2475
Hannan-Quinn criter.
13.85241
F-statistic
10.49736
Durbin-Watson stat
1.320747
Prob(F-statistic)
0.000000
Based on Table 11 with a significance level of α = 0.05, F
table
of 2.77 and F
cal
of 10.49736 were
obtained. A probability value of F of 0.000000, which is less than 0.05, indicates that H0 is rejected
and H1 is accepted. Therefore, it can be concluded that the CR, DER, and ROA simultaneously have a
significant influence on the Stock Price.
Effect of Current Ratio on Stock Price
The results of the study stated that the CR did not have a significant effect on the stock price.
The results of this study are in line with the research of Meilani et al. (2023) and Aryani et al. (2024),
which stated that the Current Ratio does not have a significant effect on stock prices. In theory, good
liquidity can signal a company's good financial health, but in this study, the results show that liquidity
measured by the current ratio does not significantly affect stock prices. This can be caused by several
factors, such as market conditions that pay more attention to other factors, such as profitability or
company growth. In addition, investors see that high liquidity can indicate inefficient management
when allocating assets. In addition, this may be due to the unique characteristics of this sector, where
investments in property and real estate tend to have longer cycles, and investors may focus more on
other aspects such as profitability and long-term growth potential rather than short-term liquidity.
In the context of the property and real estate sector, liquidity is not always the main factor for
investors because businesses in this sector often involve long-term projects with fluctuating cash
flows. Investors may pay more attention to how the company manages its long-term assets and
liabilities, as well as how it can generate profits from its assets, rather than the current ratio, which
only reflects short-term liquidity conditions. Therefore, the current ratio may not provide an accurate
picture of a company's long-term financial health, making it less relevant in determining stock prices.
Moreover, stock prices are often influenced by various external factors such as macroeconomic
conditions, changes in government policy, and market sentiment, which may be more dominant than
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internal factors like liquidity ratios. In the case of property and real estate companies, investors may
be more interested in the growth prospects of projects, the stability of rental income, or the value of
land assets owned by the company.
The Effect of Debt to Equity Ratio on Stock Prices
The results of the study stated that the DER did not have a significant effect on stock prices. The
results of this study are in line with the research of Verawati et al. (2024) and Aryani et al. (2024),
which stated that the Equity Ratio does not have a significant effect on stock prices. In financial theory,
high debt use can increase a company's financial risk, which in turn can affect stock prices. However,
the results of this study show that DER does not have a significant effect on stock prices. This could
be interpreted as investors may see the use of debt as natural and not necessarily bad, especially if
the debt is used for productive financing and generates higher profits. In addition, market conditions
and investors' perception of the company's risk also affect the valuation of DER. Moreover, investors
may not be overly focused on capital structure when evaluating stocks in this sector, but rather pay
more attention to other factors that are more relevant to the characteristics of the property industry.
The property and real estate sector has different characteristics from other sectors, where
high debt usage is often necessary to finance large and long-term projects. In this context, investors
may recognize that a high DER is typical and even necessary to drive business growth. Therefore, a
high level of leverage may not be seen as a significant risk indicator but rather as a common
operational strategy in this sector. Investors are likely more concerned with how the debt is used to
generate future cash flows rather than merely focusing on the DER itself.
Moreover, stock prices in this sector are more likely to be influenced by property growth
prospects, market stability, and the value of assets owned by the company, rather than simply the
comparison between debt and equity. External factors such as government policies, interest rates,
and macroeconomic conditions also play an important role in determining stock prices in the
property and real estate sector. Thus, while DER is an important indicator in financial analysis, the
study's findings suggest that in the context of Indonesia's property and real estate sector, this ratio
does not have a significant impact on stock prices during the 2018-2023 period.
Effect of Return on Asset on Stock Price
The results of the study stated that ROA had a significant effect on stock price, contributing
32.76%. The findings of this study are consistent with those of Fazriati and Herlinawati (2024), who
found that ROA has a considerable effect on stock prices. This conclusion is supported by study
undertaken by Mayasari et al. (2024), who found that ROA has a considerable impact on stock prices.
The study's findings are consistent with financial theory, which claims that high profitability shows
superior corporate performance and asset efficiency, hence raising the company's worth and stock
price. A high ROA implies a company's capacity to make a larger profit from its assets, prompting
investors to purchase the company's shares, ultimately driving the stock price up.
The property and real estate sector often requires substantial investment in assets such as land
and buildings, which are the primary sources of the company's revenue. Therefore, ROA becomes a
relevant measure to assess how effectively the company is maximizing the use of these assets to
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generate profit. When ROA shows an increase, it is usually interpreted by investors as a sign that the
company is managing its assets well, which in turn boosts investor confidence and drives up stock
prices.
Furthermore, a high ROA is typically associated with companies that have a solid business
strategy and effective management, capable of managing resources well to achieve optimal
profitability. In the property and real estate sector, where large projects require careful management,
ROA becomes a more important indicator compared to other ratios such as liquidity or leverage.
Therefore, the research findings indicating the significant impact of ROA on stock prices suggest that
investors in this sector tend to place greater value on operational efficiency and the company's ability
to generate profit from its assets.
The Effect of Current Assets, debt-to-equity ratio, and Return on Asset on Stock Price
The study's results expressed that the current proportion, value proportion, and return on
resources at the same time had a critical impact on stock cost. This articulation is proven by the comes
about of the F test, which delivered indigo Fcal > Ftabel of 10.497 > 2.77 with a noteworthiness esteem
of 0.000000 < 0.05. So, H0 is rejected, and H4 is acknowledged. This study is about the adjustments
to the investigation of Verawati et al. (2024), who expressed that the current proportion, debt-to-
equity ratio, and return on resources all influence stock costs. The comes about of calculation of the
assurance coefficient shows that the factors of Current Ratio, Debt-to-Equity Ratio, and Return on
Resource have a powerful commitment of 72.82%. In comparison, the remaining 27.18% are affected
by other components, including the Current Ratio, debt-to-equity ratio, and ROA.
The implications of the results of the study that show that the CR and DER are not significant to the
stock price, while the ROA is significant, can be explained as follows:
1) Insignificant Current Ratio (CR): The results of the study that show that CR does not have a
significant influence on the stock price can be interpreted that the company's liquidity, as
measured through CR, is not the main factor that investors consider in determining the stock
price. This may be due to investors focusing more on the profitability and growth aspects of the
company. In addition, too high liquidity can also be interpreted as inefficient asset management,
which investors do not want.
2) Debt to Equity Ratio (DER) Not Significant: The finding that DER has no significant effect suggests
that the use of debt in a company's capital structure does not directly affect investors' decisions
regarding stock valuation. Investors may view debt as a normal part of a company's financial
strategy, especially if it is used for productive financing and potentially profitable. Market
conditions and investors' perception of a company's risk can also affect how DER is considered
in investment decisions.
3) Significant Return on Asset (ROA): The significant influence of ROA on stock prices confirms the
importance of profitability in investment decisions. A high ROA indicates the company's ability
to generate profits from its assets, which ultimately increases the attractiveness of the company's
shares to investors. Investors tend to perceive companies with high ROA as more efficient and
profitable, thus increasing demand and stock prices.
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Overall, these findings show that in the property and real estate sector on the Indonesia Stock
Exchange, profitability is a more important indicator for investors than liquidity or financial leverage
in influencing stock prices.
4. Conclusion
Based on the research findings, it can be concluded that the current ratio (CR) and debt-to-
equity ratio (DER) do not have a significant impact on stock prices in the property and real estate
sector companies listed on the Indonesia Stock Exchange for the 2018-2023 period. This indicates
that liquidity and capital structure are not the primary factors considered by investors when
evaluating stocks in this sector. On the other hand, return on assets (ROA) has been proven to have a
significant impact on stock prices, indicating that the efficiency of a company in generating profits
from its assets is a more important indicator for investors when determining the value of stocks in
property and real estate companies. These findings suggest that investors are more focused on
operational performance reflecting profitability rather than liquidity and leverage when assessing
stocks in this sector.
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