The Effect of Cash Flow Informations to the Stock Price or the Stock Trading Volume on the Jakarta Stock Exchange During the Monetary Crisis

Abstract

The Indonesian Institute of Accountant (IAI) published the Statement of Financial Accounting Standard (PSAK) no. 2 concerning the Cash Flow Statement which obliges companies to publish the statements of cash flow beean in January 1st, 1995. The objective of this research is to examine the effects of cash flows information to the stock price or stock trading volume on the Jakarta stock exchange for the year 1998 until 2003. There are 10 firms which are listed in Jakarta stock exchange that are included in LQ45 and active traded were taken as the data in this research The data from audited financial statements from 1998 until 2003 were taken from Jakarta stock exchange corner in Universitas Islam Indonesia. Yogyakarta. The statistic method used to test hypotheses is Bivariate Linear Regression and Multiple Regression analysis. The empirical results indicated that there are no significant effects between cash flows information which consist of cash flow from operating activities (CFOp) cash flow from investing activities (CFIn), cash flow from financing activities (CFFi), and the total of cash flow component (CFOp), (CFIn), (CFFi) to stock price in Jakarta stock exchange and also there are no significant effects among CFOp CFIn, CFFi and total of CFOp, CFIn, CFFi to stock trading volume in Jakarta stock exchange for year 1998 until 2003. The reason was that almost the investors in Indonesia just speculate in investing their fund especially during monetary crisis which is hit Indonesia. The investors tend to see rumors, politic condition, investing trend and so on than using cash flow information as a consideration tool in making their investment decision.