Articles

Impact of Sharia Inclusion and Financial Ratios on Stock Price: An Analysis of Companies Listed in the SRI-Kehati Index (2014-2023)

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This study aims to analyze the impact of Sharia inclusion and financial ratios on the stock performance of companies listed in the SRI-Kehati Index during the period 2014-2019. The SRI-Kehati Index reflects companies committed to socially and environmentally responsible investment. Using panel data regression methods, this study evaluates how financial ratios such as the DAR , P/E , and ROE  affect stock prices. Macroeconomic variables like Gross Domestic Product (GDP) and inflation are used as control variables. The results indicate that being Sharia-compliant doesn’t significantly impact stock prices. Similarly, the DAR didn’t have a significant effect. On the other hand, the return-on-equity ratio had a positive significant impact on stock prices, showing that good management and strong financial health boost investor confidence and market performance. Conversely, the P/E ratio had a negative significant impact, likely because high P/E ratios raise concerns about overvaluation and the sustainability of high stock prices relative to earnings.

Examination Stock Underperformance Leveraging Financial Ratios, Intrinsic Valuation, and Multiple Market Approach (Case Study: Indonesia Leading MRO Company)

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AMF a prominent MRO company in Asia-Pacific region, especially Indonesia, has experienced decline in stock performance since its IPO in 2017. This study aims to discover factors contributing in company’s declining value and provide feasible recommendation to improve stock performance and financial health. A ten-year financial report assessment from 2014 to 2023 was conducted to gain a broader overview of company’s financial condition. This study examines financial ratios and compared to industry average through Multiple Market Approach. External risk affecting the underperformance of stock are also evaluated through PESTEL and Porter’s Five Forces. Result of the study indicate underperformance of AMF is due to decreasing profitability margin, inefficient use of assets, increasing operational expenses, and unfavourable external economic condition. The evaluation also reveal that the stock undervalued by market, where this statement is reinforced by intrinsic value of company is 3.88x higher than current market price, as well as supported by comparisons with similar industries where the financial ratios such as P/E ratio, M/B ratio, and EV/EBITDA are below industry average. The analysis proposes stock performance enhancement and financial stability by optimizing operational processes, capitalizing on technological advancement, and establishing strategic partnership to diversify revenue streams and enhance market presence.