The Influence of Profitability and Price on Book Value on Stock Prices (A Study on Banking Companies in the Indonesia Stock Exchange in the LQ45 Index for the Years 2019- 2023)

DOI

10.2991/978-94-6463-817-2_39How to use a DOI?

Keywords

Profitability; Price to Book Value; Stock Price

Abstract

This research investigates the influence of profitability, dividend policy, and Price to Book Value (PBV) on banking businesses’ stock prices on the Indonesia Stock Exchange’s LQ45 index from 2019 to 2023. This research employs a descriptive-quantitative analysis with a classical assumption test. Data is collected from secondary sources in financial statements. The statistical techniques include multiple linear regression analysis, multiple correlation, determination coefficient, t-test, and F-test. Profitability is measured using (EPS). The findings indicate that profitability measured by EPS has a significant positive impact on stock prices. Furthermore, PBV demonstrates a significant positive correlation with stock prices, suggesting that companies with higher market values than their book values tend to have higher stock prices. These results support signaling theory, which posits that financial reports and corporate policies serve as signals to investors regarding the financial health and prospects of the company. The study suggests that banking companies aiming to enhance their stock prices should focus on improving profitability, maintaining stable dividend policies, and increasing market values. The implications of these findings can aid company managers, investors, and policymakers in making better decisions regarding investment and corporate management.

Copyright

© 2025 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Daffa Adipramana
AU  - Puspo Dewi Dirgantari
AU  - Masharyono
PY  - 2025
DA  - 2025/09/12
TI  - The Influence of Profitability and Price on Book Value on Stock Prices (A Study on Banking Companies in the Indonesia Stock Exchange in the LQ45 Index for the Years 2019- 2023)
BT  - Proceedings of the 9th Global Conference on Business, Management and Entrepreneurship (GCBME 2024)
PB  - Atlantis Press
SP  - 317
EP  - 323
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-817-2_39
DO  - 10.2991/978-94-6463-817-2_39
ID  - Adipramana2025
ER  -