Open Access
Article
SciPap-1023
Are Financial Statements (Less) Fundamental to Investor’s Decisions?: Study of Indonesian Stock Exchange
by
Yulita Setiawanta 1,* , Imam Ghozali 2, Abdul Rohman 3 and Agus Purwanto 4
1 Faculty of Economics and Business, Dian Nuswantoro University, Jl. Nakula I No. 5_11, C Building Seconds Floors, Semarang 50131, Indonesia
2 Faculty of Economics and Business, Dian Nuswantoro University, Jl. Prof Sudartho,. SH, Tembalang, Semarang 50275, Indonesia
3 Faculty of Economics and Business, Dian Nuswantoro University, Jl. Prof Sudartho,. SH, Tembalang, Semarang 50275, Indonesia
4 Faculty of Economics and Business, Dian Nuswantoro University, Jl. Prof Sudartho,. SH, Tembalang, Semarang 50275, Indonesia
* Authors to whom correspondence should be addressed.
Abstract: This study aims to determine whether financial performance information companies listing on PT. IDX to investors through stock prices is still fundamental or not and also to find out whether investors need information other than financial data. Information on the financial performance in this study was proxied by profitability measured by ROA and ROE, CR and solvency measured DER measured liquidity, and closing stock prices measured investor reaction. The object of this research was the LQ45 company, which topped the list consecutively from 2008 to 2017. This type of research object was intentionally sought, which stood in the top list of companies whose shares are most sought after by investors for ten consecutive years, and obtained 110 data samples for processing. The results showed that solvency (DER) and liquidity (CR) influenced investor reactions at the 5% significance level, while profitability (ROA) and ROE did not affect. Thus explains that information about Solvency and Liquidity is financial information that is still relevant or fundamentally needed by investors. At the same time, it found that profitability was less suiTab. as a signal which had a significant impact on investors' investment decisions.
Keywords: Financial Statements, Return On Equity, Return On Assets, Current Ratios, Debt To Equity Ratios
JEL classification: G10 - General, G20 - General, G32 - Financing Policy • Financial Risk and Risk Management • Capital and Ownership Structure • Value of Firms • Goodwill, G41 - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
SciPap 2020, 28(1), 1023
Received: 5 September 2019 / Accepted: 29 April 2020 / Published: 30 April 2020