The Effect of Selected Financial Ratios on Stock Prices in the Transportation Sub-sector of the Indonesian Stock Exchange
Irpan Tripani *
Widyatama University, Indonesia.
Andri Pramana
Widyatama University, Indonesia.
*Author to whom correspondence should be addressed.
Abstract
Objective: This study aims to analyze and examine the effect of Total Asset Turnover (TATO), Sales Growth, and Return on Assets (ROA) on stock prices of transportation subsector companies listed on the Indonesia Stock Exchange (IDX) during the 2020–2024 period. In addition, the study seeks to identify which variable has the most dominant influence on stock price movements, thereby providing insights for investors in evaluating the financial performance of transportation companies and its implications for investment decision-making in the capital market.
Research Design: This study employs a quantitative research design with an associative causal approach, aiming to explain the cause-and-effect relationships between independent variables (TATO, Sales Growth, and ROA) and the dependent variable (stock prices).
Methodology: The study uses secondary data in the form of audited annual financial reports and year-end closing stock prices of transportation subsector companies listed on the Indonesia Stock Exchange for the 2020–2024 period. The research sample consists of 27 companies, resulting in a total of 135 observations (27 companies × 5 years). The independent variables include Total Asset Turnover, Sales Growth, and Return on Assets, while the dependent variable is stock price. Data analysis was conducted using multiple linear regression with IBM SPSS Statistics. The analysis procedure includes classical assumption tests (normality, multicollinearity, heteroscedasticity, and autocorrelation), followed by regression analysis, partial testing (t-test), simultaneous testing (F-test), and coefficient of determination (R²) to evaluate the influence of the independent variables on stock prices.
Results: The results show that, partially, Total Asset Turnover has a positive and significant effect on stock prices (t = 5.076; sig. = 0.000 < 0.05). Sales Growth also has a positive and significant influence on stock prices (t = 2.160; sig. = 0.033 < 0.05), while Return on Assets exhibits a positive and significant effect as well (t = 4.699; sig. = 0.000 < 0.05). Simultaneously, the three variables significantly affect stock prices (F = 23.654; sig. = 0.000 < 0.05). The R² value of 0.351 indicates that the regression model explains 35.1% of the variation in stock prices.
Conclusion: The findings confirm that Total Asset Turnover, Sales Growth, and Return on Assets have positive and significant effects on stock prices of transportation subsector companies listed on the Indonesia Stock Exchange during the 2020–2024 period, both partially and simultaneously. These results imply that more efficient asset utilization, stronger sales growth, and higher profitability tend to be associated with higher stock prices. From a practical perspective, the study suggests that corporate management should focus on improving asset efficiency, sustaining revenue growth, and maintaining profitability to enhance firm value in the capital market. For investors, the results provide empirical evidence that these financial ratios can be used as important indicators in evaluating transportation sector stocks. The model demonstrates moderate explanatory power (35.1%), indicating that stock price movements are also influenced by other external factors beyond the scope of this study.
Keywords: Stock price, Total Asset Turnover, TATO, sales growth, growth sales, Return on Assets, ROA, financial performance, transportation subsector, Indonesia Stock Exchange, IDX