Financial Ratios and Stock Price Performance: Empirical Evidence from LQ45 Firms on the Indonesia Stock Exchange

Abstract

Financial ratios are important indicators used by investors to evaluate a company's financial performance. This study aims to examine the effect of Return on Assets (ROA), Return on Equity (ROE), Earnings per Share (EPS), and Debt to Equity Ratio (DER) on stock prices of companies included in the LQ45 index listed on the Indonesia Stock Exchange during the period 2020–2025. This research uses a quantitative approach with purposive sampling technique. The sample consists of 21 companies that meet the predetermined criteria. The data were obtained from the official website of the Indonesia Stock Exchange and analyzed using multiple linear regression with the help of SPSS version 26. The results show that simultaneously ROA, ROE, EPS, and DER have a significant effect on stock prices. The coefficient of determination indicates that 57.7% of stock price variation can be explained by the independent variables used in this study, while the remaining 42.3% is influenced by other variables outside the research model. Partially, ROA, ROE, EPS, and DER each have a positive and significant effect on stock prices.