文章基本信息

标题：Predicting returns with financial ratios: Evidence from Indonesian Stock Exchange
本地全文：下载
作者：Yohanes Indrayono
期刊名称：Management Science Letters
印刷版ISSN：1923-9335
电子版ISSN：1923-9343
出版年度：2019
卷号：9
期号：11
页码：1901-1908
DOI：10.5267/j.msl.2019.6.003
出版社：Growing Science
摘要：The prediction of stock prices movement has always been a concern for investors when they make investment decisions. Most of stock markets all over the world provide data on price to earnings ratio (P/E) and price to book value ratio (P/B). How reliable these data are for investment is not clearly known. This study examines how accounting data of P/E and P/B can predict the stock prices. The study selects data from 218 firms listed in Indonesian Stock Exchange as sample over the period 2007-2016 and they are analyzed by multiple linear regression. The study shows that price to earnings ratio (P/E ratio) had no effect on stock prices for each year and also in all periods, but price to book value ratio (P/B ratio) had positive effect on stock prices, which means that the higher the P/B ratio, the more expensive the stock price. The decision of firm management is to maximize price to book value ratio (P/B ratio) which means to maximize the shareholders’ wealth. However, on the contrary, investors always seek the lower P/B ratio to get the desirable gains. Nevertheless, since the statistical analyses show there are many other variables affecting the stock prices movement, the investors should not rely only on P/B ratio for making investment decisions.
关键词：Price to earnings ratio (P;E) Price to book value ratio (P;B) Stock prices Decision making Indonesian Stock Exchange