Aisah 1 Mut’mainna 2 , Syafira Larasati Yasram 3
4. Size Moderate the Influence of the Debt to Equity Ratio (DER) Against PBV
Based on the summary of the results of hypothesis testing above, it shows that size is able to moderate the effect of the debt to equity ratio on PBV. A high DER value indicates the greater the debt that must be paid by the company so that it can reduce the company's profitability. That way the SIZE value will be decreased due to reduced profits received by shareholders. This can be a negative signal that makes investor interest decrease so that PBV decreases.
However, a high DER can also indicate that the company is expanding its business so that it can increase the achievement of company profits. That way earnings per share will also increase. This can be a positive signal for investors so that PBV also increases.
The results of this study are in line with research conducted by Mukhtasyam et al., (2020) which states that SIZE can moderate the effect of DER on PBV.
However, it is different from the research conducted by Endraswati and Novianti (2015) and Haryanti and Murtiasih (2019) which stated that SIZE does not moderate the effect of DER on PBV.
CONCLUSIONS AND SUGGESTIONS CONCLUSION
Based on the results of the research and discussion that has been carried out, the conclusions that can be drawn are as follows:
1. CR has a significant negative effect on firm value 2. DER has no significant effect on firm value 3. size moderate the effect of CR on firm value.
4. size moderates the effect of DER on firm value SUGGESTION
The suggestions from the research to be conveyed are as follows:
1. For the management of the company, it is better to always evaluate the company's performance by optimizing the best use of current assets in order to get maximum profit so as to be able to create value for shareholders.
2. Investors should be more careful in understanding the company's financial statements when investing.
3. In this study there are still deficiencies. Therefore, it is hoped that further research that examines stock prices should use other factors. Not only involving factors belonging to the company's financial performance, but also using other factors such as macroeconomics and so on.
4. For future researchers, researchers should increase the vulnerable period used in conducting research and use other samples, so that this research can be generalized to all companies in Indonesia.
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THE EFFECT OF NET PROFIT MARGIN AND EARNINGS PER SHARE ON SHARE PRICE WITH DIVIDEND POLICY AS A
MODERATION VARIABLE
Florenika Rahmayuni Sembiring1, Listiorini2 , Ruswan Nurmadi3 Program Studi Akuntansi, Universitas Harapan Medan
Email Address: [email protected] Abstract
The share price, which is an indicator of the successful management of a company, is a very important factor and must be considered by investors when making an investment. An increase in share price will also show an increase in the wealth of investors as shareholders. This shows the importance of analysis of share prices and the factors that influence share prices. This research analyzes the effect of net profit margin and earnings per share, on share prices with dividend policy as a moderating variable. The population in this research are all banking companies listed on the Indonesia Stock Exchange for the 2016-2020 period. The data analysis technique used moderated regression analysis (MRA).
The results showed that net profit margin and earning per share affect share prices. Dividend policy is able to moderate the effect of earnings per share on share prices but unable to moderate the effect of net profit margin on share prices.
Keywords: Earning per share, Net Profit Margin, Share price, Dividend policy INTRODUCTION
In investing their capital, investors will certainly consider in advance the aspects within the intended company, so that in the future the main goal of investors in investing capital will be achieved, namely obtaining a share of the company's profits. One of the aspects considered by investors is the share price, which is a very important factor, because it is an indicator of the success of company management. An increase in share price will also reflect an increase in the wealth of shareholders as investors.
According to (Jogiyanto, 2022), the stock price is the price that occurs in the stock exchange market at a certain time determined by market participants and determined by the demand and supply of the shares concerned in the capital market. According to (Tandelilin, 2017), the stock price is a reflection of investors' expectations of the factors of earnings, cash flow and the level of return required by investors, of which the three factors are also strongly influenced by macroeconomic performance. Therefore, it can be seen that it is very important for the role of stock prices to attract investors' attention so that investors are interested in investing their capital.
Banking companies are one of the economic sectors engaged in finance that has an important role, namely providing and channeling funds for the economic development of society. In order to continue to improve its performance, banking companies must be able to attract investors in order to obtain funds from investors. Supposedly, with the increasing need for people to obtain banking services, the company's share price will stabilize and tend to increase. But in reality, even the share prices of large banking companies, such as Banks, can fluctuate, as quoted in cnbcindonesia.com (2023).
Table 1
Banking Company Share Price Movement as of January 10, 2023
Source: www.cnbcindonesia.com, 2023
Reported by cncbindonesia.com (2023), banking stocks with the largest market capitalization (big banks) were observed to weaken again in the first trading session on Tuesday (10/1/2023) and contributed to the weight of the Composite Stock Price Index (JCI). It can be seen here, the large role of banking companies in the JCI. Despite being an industry that attracts investors, the banking industry itself is also prone to share price fluctuations, as it is sensitive to the global financial situation.
This study will analyze the factors that affect the stock price of banking companies by using dividends as moderation. According to (Prijanto et al., 2021), profitability is one of the factors that affect stock prices. The greater the profit or profit achieved by the company, the more investors will want to invest their capital, which of course will also increase the company's share price. (Kasmir, 2018) states that the profitability ratio is a ratio to assess the company's ability to seek profit or profit in a certain period, where one way to determine the company's profitability is through Net Profit Margin (NPM). NPM is used to assess the percentage of net profit achieved after deducting taxes from revenue earned from sales. Research (Prijanto et al., 2021) and (Musdalipah & Cholid, 2019) state that NPM significantly affects stock prices. However, the results of research from (Najiyah, 2021) and (Hadi, 2018) state that NPM does not significantly affect stock prices.
According to (Sudibyo, 2021), another factor that affects stock prices is earnings per share (EPS). EPS is the result of the calculation of the company's net profit divided by the number of shares outstanding. If the company's EPS is higher, more investors will want to buy the shares which will cause the stock price to be high. The higher the EPS value of a company, the greater the profit that the company will provide to shareholders. Research (Sudibyo, 2021) and (Lilianti, 2018) state that EPS significantly affects stock prices. However, the results of research (Alfiah & Lestarinimgsih, 2017) state that EPS does not significantly affect stock prices.
According to (Kurnia & Sunaryo, 2023), investors who invest their capital in a company certainly expect the company to earn large profits (profits), where part of the company's profits are distributed to shareholders in the form of dividends. Dividend Payout Ratio (DPR) which is one way to calculate dividends.
(Kurnia & Sunaryo, 2023) states that DPR moderates the effect of NPM on stock prices, although research (Umar & Annisa, 2022) states that DPR is unable to moderate the effect of NPM on stock prices. On the other hand, according to (Umar & Annisa, 2022) and (Sudibyo, 2021), DPR is able to moderate the effect of EPS on stock price, although research (Gulo et al., 2022) states that DPR is unable to moderate the effect of EPS on stock price.
LITERATURE REVIEW Stock Prices
According to (Saepudin et al., 2022), the stock price is the price formed from the interaction of sellers and buyers of shares based on expectations of company profits, where if the stock price drops, investors are more likely to sell their shares, and vice versa, if the stock price increases, investors are more likely to buy the company's shares. The stock price reflects the company's performance.
Companies with stable stock prices and tend to increase, will increase investor interest in investing. The share price can be calculated by closing price (Kasmir, 2018).
Net Profit Margin
Net Profit Margin (NPM) is the percentage of revenue generated from business activities and calculates each operational fund flow and tax cost. All of these fund flows will then be calculated and measured to determine the percentage of profit obtained. (Warren et al., 2017) states that NPM is the profit on sales after calculating costs and income taxes. The higher the NPM, the better the operation of a company, so the higher the share price.
Earnings Per Share
Earnings Per Share (EPS) is earnings per share obtained from the calculation of the company's net income divided by the number of shares outstanding. A high company EPS will certainly increase the company's share price. When EPS rises, it means that the company gets more profit that can be used to develop the business or for dividends for investors (Van Horne &
Wachowicz Jr, 2012).
Dividend Payout Ratio
Dividend Payout Ratio (DPR) is the ratio of the total amount of dividends paid to shareholders to the company's net income. The greater the DPR ratio, the greater the share of company profits that will be distributed to shareholders (Tandelilin, 2017). Investors will be more interested in investing in companies that regularly pay dividends.
RESEARCH METHODS Conceptual Framework
Figure 1. Conceptual Framework
In the conceptual framework above, it can be seen that this study aims to analyze the effect of Net Profit Margin (NPM) and Earnings Per Share (EPS) on Stock Price with Dividend Payout Ratio (DPR) as a moderating variable.
Then the hypothesis in this study is:
H1: Net Profit Margin (NPM) has a significant effect on Stock Price H2: Earnings Per Share (EPS) has a significant effect on Stock price
H3: Dividend Payout Ratio (DPR) is able to significantly strengthen the effect of Net Profit Margin (NPM) on stock prices.
H4: Dividend Payout Ratio (DPR) is able to significantly strengthen the effect of Earnings Per Share (EPS) on stock prices.
Population and Sample
The research population is banking sector companies listed on the Indonesia Stock Exchange for the 2016-2020 period, totaling 47 companies (www.idx.co.id). The research sample was determined based on purposive sampling, which means sample selection based on certain criteria (Ghozali, 2018). The criteria for banking companies that are sampled are as follows:
1) The company is a company that is included in the type of banking during the period 2016-2020.
2) Banking companies have issued and published financial reports on time during the 2016-2020 period.
3) Banking companies that earned profits during 2016-2020.
The number of samples that meet the above criteria amounted to 28 companies, for 5 years of research, so that the sample amounted to 140. The method of analysis of this research is multiple linear regression analysis and residual test to see the presence or absence of moderator variables (Ghozali, 2018).
The data analysis technique used is the Regression Determinant Test to see how much influence the independent variable has on the dependent variable, the Regression t-Test to see the effect of the independent variable on the dependent variable and the Interaction Test to see how much influence the independent variable has on the dependent variable after moderation.
RESEARCH RESULTS AND DISCUSSION
Keseluruhan data harus telah melalui uji asumsi klasik untuk menghindari bias data (Ghozali, 2018). Transformasi data telah dilakukan dan data dinyatakan lolos dan layak untuk diolah.
Table 2
Determination Coefficient Test Results Model Summaryb
Mode l
R R Square Adjusted R Square
Std. Error of the Estimate
1 .842a .721 .701 .74122
a. Predictors: (Constant), LN_EPS, LN_NPM b. Dependent Variable: LN_HARGA_SAHAM Source : Data processed by researchers, 2023
In table 2 above, the adjusted R square value is 0.701, which means that the stock price can be explained by net profit margin and earnings per share by
70.1%, while the other 29.9% is explained by other variables outside the variables used in this study.
Hyphotesis Test a. t-Test
Table 3 t-Test Results
Coefficientsa
Model Unstandardized
Coefficients
Standardized Coefficients
T Sig.
B Std.
Error
Beta
1
(Constant) .911 .357 2.370 .012
LN_NPM -.323 .125 -.287 -2.438 .010
LN_EPS .912 .037 1.223 18.868 .000
a. Dependent Variable: LN_HARGA_SAHAM Source : Data processed by researchers, 2023
From table 3 above, the conclusions can be explained as follows:
1. The significance value of NPM (X1) of 0.010 <0.05 indicates that NPM (X1) has a significant effect on Stock Price (Y). So, the hypothesis that NPM has a significant effect on Stock Price (H1) is accepted.
2. The significance value of EPS (X2) of 0.000 <0.05 indicates that EPS (X2) has a significant effect on Stock Price (Y). So, the hypothesis that EPS has a significant effect on Stock Price (H2) is accepted..
b. Moderating Variable Tests
The purpose of this analysis is to determine whether the moderating variable will strengthen or weaken the relationship between the independent variable and the dependent variable. In this study we used the residual test.
Table 4
Significance Test Results of DPR in Moderating the Effect of NPM on Stock Price
Coefficientsa
Model Unstandardized
Coefficients
Standardized Coefficients
t Sig.
B Std. Error Beta
1 (Constant) 6.850 .220 30.100 .000
LN_NPM .072 .085 .070 .923 .344
a. Dependent Variable: LN_DPS
Source : Data processed by researchers, 2023
From table 4 above, it shows that the value or significance is 0.344> 0.05.
The above equation can be used to obtain the residual value of the DPR (moderating variable). The residual value is used as a variable in residual testing I. The following is a table of residual test results I:
Table 5
Residual Test Results I Coefficientsa
Model Unstandardized
Coefficients
Standardized Coefficients
t Sig.
B Std. Error Beta 1
(Constant) 1.411 .281 4.866 .000
LN_HARGA_SAH
AM -.041 .032 -.101 -
1.183 .223 a. Dependent Variable: ABS_RES2
Source : Data processed by researchers, 2023
Based on table 5 above, the significance value is 0.223> 0.05, it can be concluded that DPR cannot moderate the effect of NPM on Share Price. So, the hypothesis that DPR is able to significantly strengthen the effect of NPM on Stock Price (H3) is rejected.
Table 6
Significance Test Results of DPR in Moderating the Effect of EPS on Stock Price
Coefficientsa
Model Unstandardized
Coefficients
Standardized Coefficients
t Sig.
B Std. Error Beta
1 (Constant) 4.602 .159 27.042 .000
LN_EPS .501 .025 .738 13.112 .000
a. Dependent Variable: LN_DPS
Source : Data processed by researchers, 2023
From table 6 above, it shows that the value or significance is 0.000 <0.05.
The above equation can be used to obtain the residual value of DPR (moderating variable). The residual value is used as a variable in residual II testing. The following is a table of residual II test results:
Table 7
Residual Test Results II Coefficientsa
Model Unstandardized
Coefficients
Standardized Coefficients
t Sig.
B Std. Error Beta 1
(Constant) 1.250 .254 4.658 .000
LN_HARGA_SA
HAM -.101 .030 -.212 -2.702 .006
a. Dependent Variable: ABS_RES2
Source : Data processed by researchers, 2023
Based on table 7 above, the significance value is 0.006 <0.05, it is concluded that DPR can moderate the effect of EPS on Stock Price. So, the DPR hypothesis is able to significantly strengthen the effect of EPS on Stock Price (H4) is accepted..