The Influence of Internal Factors on Stock Prices: Cross-Sector Empirical Evidence in the Indonesian Capital Market

Muhammad Mukhsin; Ninik Lukiana; Aji Prasetyo Suyono

doi:10.30741/ijamr.v7i1.1905

Authors

Muhammad Mukhsin Institut Teknologi dan Bisnis Widya Gama Lumajang
Ninik Lukiana Institut Teknologi dan Bisnis Widya Gama Lumajang
Aji Prasetyo Suyono Institut Teknologi dan Bisnis Widya Gama Lumajang

DOI:

https://doi.org/10.30741/ijamr.v7i1.1905

Keywords:

Catering Sector, Raw Material Price Fluctuations, Sensitivity Analysis, Optimal Funding Strategy, Profitability

Abstract

This study aims to examine the effect of internal factors on stock prices in the Indonesian capital market. The problem arises because previous studies on the role of profitability, leverage, and company size in determining market valuation still show inconsistent results. Using a quantitative approach, this study employs multiple linear regression analysis on 985 observations of companies from the financial, primary consumer, and technology sectors. The independent variables tested include ROE, DER, company size, and sector dummy variables, with stock prices as the dependent variable. The results of the analysis show that ROE and DER have a negative effect on stock prices, while company size has a significant positive effect. In addition, the primary consumer and technology sectors have higher stock prices than the financial sector as a reference. The conclusion of this study confirms that profitability is not always a positive signal for investors, while large company size reflects trust and stability. These findings contribute to the literature on the relationship between internal factors and stock prices, while also offering practical implications for investors and company management in investment decision-making.

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