The Effect of Price Earning Ratio (PER), Return On Equity (ROE), Net Profit Margin (NPM), and Return On Assets (ROA) to The Proportion of Foreign Ownership in Jakarta Stock Exchange

Abstract

Riswandi, Heri (2007). The Effect of Financial Ratio PER, ROE, NPM, and ROA to the Proportion of Foreign Ownership in Jakarta Stock Exchange. Yogyakarta. Faculty ofEconomics. Islamic University ofIndonesia. The aim of this research is to find out and analyze the effect of company financial ratios on proportion of foreign ownership in Jakarta Stock Exchange. The financial ratios are crucial information for investor in analyzing stock and predicting the firm's financial power in the future. This research focused on investigating factors determined the proportion of foreign ownership of Indonesian Companies listing at Jakarta Stock Exchange in the period of 2002- 2005. This research analyzed yearly data which use proportion of foreign ownership as dependent variable. The independent variables consist Of Price Earning Ratio (PER), Return on Equity (ROE), Net Profit Margin (NPM), and Return on Assets (ROA). The study uses linear multiple regression model of a proportion of foreign ownership as the proxy of dependent variable. The model is used to explain the effect of Price Earning Ratio (PER), Return on Equity (ROE), Net Profit Margin (NPM), and Return on Assets (ROA) on proportion of foreign ownership. The result of this research is all four independent variables used in the model, simultaneously does not have significant effect on proportion of foreign ownership. In individual test, none of Price Earning Ratio (PER), Return on Equity (ROE), Net Profit Margin (NPM) and Return on Assets (ROA) have significant effect on proportion of foreign ownership.