This research examines three factors that may have relationships with returns on stock investment. The factors tested under this research are three types of risk associated with a company’s capital structure, company’s business risk, and market risk of the company’s stock. A company’s capital structure is measured by debt to equity ratio, a company’s business risk is measured by degree of operating leverage, while the market risk of the company’s stock is measured by stock beta. This research focuses on the food and beverages (F&B) industry. The sample firms are F&B firms that are listed on the Indonesian Stock Exchange in the period of 2003-2008. The results show that there is a positive relationship between debt to equity ratio and stock return; however this result is insignificant statistically. A similar result is found between the degree of operating leverage and stock return. There is a positive significant relationship between the stock beta and stock return. The result also shows that debt to equity ratio, degree of operating leverage, and stock beta all together do not have a significant influence on the stock returns of food and beverage companies on the Indonesian Stock Exchange during 2003-2008.
{"title":"Debt to Equity Ratio, Degree of Operating Leverage Stock Beta and Stock Returns of Food and Beverages Companies on the Indonesian Stock Exchange","authors":"Lusia Astra Sari, Y. Hutagaol","doi":"10.21512/jafa.v2i1.149","DOIUrl":"https://doi.org/10.21512/jafa.v2i1.149","url":null,"abstract":"This research examines three factors that may have relationships with returns on stock investment. The factors tested under this research are three types of risk associated with a company’s capital structure, company’s business risk, and market risk of the company’s stock. A company’s capital structure is measured by debt to equity ratio, a company’s business risk is measured by degree of operating leverage, while the market risk of the company’s stock is measured by stock beta. This research focuses on the food and beverages (F&B) industry. The sample firms are F&B firms that are listed on the Indonesian Stock Exchange in the period of 2003-2008. The results show that there is a positive relationship between debt to equity ratio and stock return; however this result is insignificant statistically. A similar result is found between the degree of operating leverage and stock return. There is a positive significant relationship between the stock beta and stock return. The result also shows that debt to equity ratio, degree of operating leverage, and stock beta all together do not have a significant influence on the stock returns of food and beverage companies on the Indonesian Stock Exchange during 2003-2008.","PeriodicalId":151258,"journal":{"name":"Journal of Applied Finance & Accounting","volume":"51 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2009-11-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127953586","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The duration of a bond is a measure of its interest rate risk. The objective of this research is to test whether corporate bond duration is higher compare to government bonds. The higher duration mean that bond’s price is more affected to the change in its yield. Effective Duration and Modified Duration Approaches are used to calculate the duration. The sample used is bonds that traded in Indonesia Stock Exchange. The result shows that there is no enough evidence that Indonesia corporate bonds duration is higher compare to government bonds. The implication for this is that there is no difference in interest rate risk between corporate bonds and government bonds.
{"title":"Analysis of Indonesia Bond’s Duration: Corporate Versus Government Bond","authors":"Rezki Adhitia","doi":"10.21512/jafa.v1i2.129","DOIUrl":"https://doi.org/10.21512/jafa.v1i2.129","url":null,"abstract":"The duration of a bond is a measure of its interest rate risk. The objective of this research is to test whether corporate bond duration is higher compare to government bonds. The higher duration mean that bond’s price is more affected to the change in its yield. Effective Duration and Modified Duration Approaches are used to calculate the duration. The sample used is bonds that traded in Indonesia Stock Exchange. The result shows that there is no enough evidence that Indonesia corporate bonds duration is higher compare to government bonds. The implication for this is that there is no difference in interest rate risk between corporate bonds and government bonds.","PeriodicalId":151258,"journal":{"name":"Journal of Applied Finance & Accounting","volume":"83 1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2009-06-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115753311","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Information has strongly influenced the capital market condition. The information could come from internal company as well as external parties. If an event contains information, usually the market will react at the time information is revealed to the market. An event study method could be used to test the content of information from the event. Like other market, Bursa Efek Indonesia is related to some information. This research analyzes the USA mortgage sub-prime effect on the banking stocks in Indonesia. The reaction from market could be seen in return abnormal changes in 7 days before and after the announcement. A sample of 26 banking stocks is chosen for this research to test the effect of USA sub-prime mortgage on banking stocks in Indonesia, particularly on its Return On Assets (ROA), Loan to Deposit Ratio (LDR), Net Interest Margin (NIM) and Non Performing Loan (NPL) with t-test and multiple regression. The result shows the abnormal returns of banking stocks at BEI are significantly influenced by USA sub-prime mortgage except 5 days and 1 day before the announcement and 1 day and 6 days after. The banking performances, ROA and NPL, are also affected by the USA sub-prime mortgage.
{"title":"Analisis Pengaruh Rasio ROA, LDR, NIM dan NPL Terhadap Abnormal Return Saham Perbankan di Indonesia pada Periode Sekitar Pengumuman Subprime Mortgage","authors":"Risky Christian Syauta, I. Widjaja","doi":"10.21512/jafa.v1i2.131","DOIUrl":"https://doi.org/10.21512/jafa.v1i2.131","url":null,"abstract":"Information has strongly influenced the capital market condition. The information could come from internal company as well as external parties. If an event contains information, usually the market will react at the time information is revealed to the market. An event study method could be used to test the content of information from the event. Like other market, Bursa Efek Indonesia is related to some information. This research analyzes the USA mortgage sub-prime effect on the banking stocks in Indonesia. The reaction from market could be seen in return abnormal changes in 7 days before and after the announcement. A sample of 26 banking stocks is chosen for this research to test the effect of USA sub-prime mortgage on banking stocks in Indonesia, particularly on its Return On Assets (ROA), Loan to Deposit Ratio (LDR), Net Interest Margin (NIM) and Non Performing Loan (NPL) with t-test and multiple regression. The result shows the abnormal returns of banking stocks at BEI are significantly influenced by USA sub-prime mortgage except 5 days and 1 day before the announcement and 1 day and 6 days after. The banking performances, ROA and NPL, are also affected by the USA sub-prime mortgage.","PeriodicalId":151258,"journal":{"name":"Journal of Applied Finance & Accounting","volume":"17 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2009-06-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123926913","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Earnings reflect the equity growth stemmed from various economic transaction, except shareholders’ transactions in certain periods. Similar to the net income concept, earnings concept includes all transactions in net revenue in current period. The research sample is 14 listed companies that reported Research & Development (R&D) expenses during 2002-2004 period. Research variables used are earnings (as the dependent variable) that is proxied by price earning ratio (PER), and accounting method chosen to record the R&D expenses (as the independent variable). The research model is a simple regression model. The result shows that accounting method chosen is significantly related to the PER, however appears does not influence the profit of the company.
{"title":"Pengaruh Pemilihan Metode Akuntansi Atas Biaya Research and Development (R&D) Terhadap Price Earnings Ratio (Studi Empirik Pada Perusahaan Sektor Industri Periode 2002-2005)","authors":"Michell Suharli, Ani Arisandi","doi":"10.21512/jafa.v1i2.132","DOIUrl":"https://doi.org/10.21512/jafa.v1i2.132","url":null,"abstract":"Earnings reflect the equity growth stemmed from various economic transaction, except shareholders’ transactions in certain periods. Similar to the net income concept, earnings concept includes all transactions in net revenue in current period. The research sample is 14 listed companies that reported Research & Development (R&D) expenses during 2002-2004 period. Research variables used are earnings (as the dependent variable) that is proxied by price earning ratio (PER), and accounting method chosen to record the R&D expenses (as the independent variable). The research model is a simple regression model. The result shows that accounting method chosen is significantly related to the PER, however appears does not influence the profit of the company.","PeriodicalId":151258,"journal":{"name":"Journal of Applied Finance & Accounting","volume":"61 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2009-06-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123911667","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The aim of this research is to find the relevant valuation measurement, firm multiplier, which is utilized by issuers or underwriters during IPO. This research uses companies that conducted IPO, in the Indonesia Stock Exchange (IDX), within year 2001 to 2007, as the research sample. The hypotheses are developed to find the relevant valuation multiplier. The data are analyzed using One-Sample T Test, Kolmogorov-Smirnov (K-S) Test, and Binomial Test. The empirical results suggest that there are similarities and differences in valuation results when comparable firm valuation is utilizing different firm multiplier. Among the five methods, i.e. arithmetic mean, median, harmonic mean, closest ROA, and closest TA, the closest TA method performs the worst in Indonesia capital market during 2001-2007. There is no statistical difference between selecting arithmetic mean, median, and harmonic mean methods. The closest ROA method outperforms the arithmetic mean and closest TA methods; however it has similar performance to median and harmonic mean methods.
{"title":"Identification of Firm Multiplier of Comparable Firm Valuation Method on Indonesian IPO","authors":"Andrew Handaya, D. Warganegara, D. S. Warganegara","doi":"10.21512/jafa.v1i2.128","DOIUrl":"https://doi.org/10.21512/jafa.v1i2.128","url":null,"abstract":"The aim of this research is to find the relevant valuation measurement, firm multiplier, which is utilized by issuers or underwriters during IPO. This research uses companies that conducted IPO, in the Indonesia Stock Exchange (IDX), within year 2001 to 2007, as the research sample. The hypotheses are developed to find the relevant valuation multiplier. The data are analyzed using One-Sample T Test, Kolmogorov-Smirnov (K-S) Test, and Binomial Test. The empirical results suggest that there are similarities and differences in valuation results when comparable firm valuation is utilizing different firm multiplier. Among the five methods, i.e. arithmetic mean, median, harmonic mean, closest ROA, and closest TA, the closest TA method performs the worst in Indonesia capital market during 2001-2007. There is no statistical difference between selecting arithmetic mean, median, and harmonic mean methods. The closest ROA method outperforms the arithmetic mean and closest TA methods; however it has similar performance to median and harmonic mean methods.","PeriodicalId":151258,"journal":{"name":"Journal of Applied Finance & Accounting","volume":"257 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2009-06-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116740984","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Research & Development (R&D) is one of significant firms’ activities that is expected to enhance firms’ future value. This paper examines the relationship between R&D with firm’s operation and market performance. The sample used is 106 firm years from 32 non-finance firms that listed in Indonesia Stock Exchange (IDX) and report R&D expenditure during period 2004-2007. Two research hypotheses are developed and tested using a multiple regression model. The findings signify that all sample firms have reported their R&D activities accordingly to the applied accounting standard. However, the hypothesis testing results shows that there is no relationship between R&D and firm’s operation and market performance. These findings imply that R&D activities in Indonesian firms are not yet perceived as an important element in firms’ value added chain.
{"title":"The Analysis of R&D Impact on the Public Listed Companies’ Performance in Indonesia","authors":"Natasha I. E., Y. Hutagaol","doi":"10.21512/jafa.v1i2.130","DOIUrl":"https://doi.org/10.21512/jafa.v1i2.130","url":null,"abstract":"Research & Development (R&D) is one of significant firms’ activities that is expected to enhance firms’ future value. This paper examines the relationship between R&D with firm’s operation and market performance. The sample used is 106 firm years from 32 non-finance firms that listed in Indonesia Stock Exchange (IDX) and report R&D expenditure during period 2004-2007. Two research hypotheses are developed and tested using a multiple regression model. The findings signify that all sample firms have reported their R&D activities accordingly to the applied accounting standard. However, the hypothesis testing results shows that there is no relationship between R&D and firm’s operation and market performance. These findings imply that R&D activities in Indonesian firms are not yet perceived as an important element in firms’ value added chain. ","PeriodicalId":151258,"journal":{"name":"Journal of Applied Finance & Accounting","volume":"25 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2009-06-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122967045","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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