The Effect of Financial Ratio and Exchange Rate on Stock Return

Abstract

This study aims to test whether there is a relationship between financial ratios and the exchange rate on stock returns. Data taken from IDX is a transportation sub-sector company during 2017- 2019. Analysis was performed using multiple linear regression analysis. The results of this study indicate that financial ratios such as Return on Assets and Debt to Equity Ratio have a positive impact on stock returns. The Exchange Rate variable has a negative impact on Stock Return. Meanwhile, the Current Ratio and Price Earnings Ratio do not contribute to an increase or decrease in Stock Returns. The implications of this study indicate that this research can be used as a reference that profitability can be used as a guide for investors in investing their funds. In addition, the current ratio cannot be used as a reference that a company with a high current ratio will also have a high stock return