Financial Ratios and Stock Performance: Study of Basic and Chemical Manufacturing Firms Indonesia (2021-2024)

Abstract

This study aims to examine the influence of financial ratios—namely liquidity, profitability (ROA), and solvency—on stock prices of basic and chemical manufacturing companies in Indonesia during the period of 2021 to 2024. A quantitative approach employing path analysis was utilized, with SmartPLS software applied to test the relationships between variables using secondary data derived from the financial statements of companies within the sector. The results indicate that profitability (ROA) has a positive and significant effect on stock prices, whereas liquidity and solvency do not exhibit significant impacts. These findings underscore that the company’s profit-generating ability is the primary factor considered by the capital market in determining stock value.