Financial ratios and stock prices: Evidence from IDX LQ45 (2020–2024)

Abstract

This study examines the effect of financial ratios on stock prices of companies listed in the IDX LQ45 index during the 2020–2024 period. This research employs a quantitative approach using secondary data obtained from the financial statements of selected companies. The sample was determined through purposive sampling, and multiple linear regression analysis was used to analyze the data. The results show that the dividend payout ratio has a significant effect on stock prices, while debt to equity ratio, return on assets, return on equity, and net profit margin do not have a significant partial effect. Simultaneously, all independent variables significantly influence stock prices. The study concludes that dividend policy is a key determinant of stock prices, highlighting the importance of dividend-related information for investors in the capital market.