Behind Stock Performance Movements: Empirical Evidence on Financial Performance and Firm Size

Authors

  • Eka Meirawati Universitas Sriwijaya
  • Tabah Rizki Universitas Sriwijaya

DOI:

https://doi.org/10.32493/eaj.v9i2.y2026.p106-120

Keywords:

Financial Performance, Stock Returns, Company Size, Pharmaceutical Sector, Indonesia Stock Exchange

Abstract

This study aims to analyze the effect of financial performance measured by Return on Assets (ROA), Return on Equity (ROE), and Earnings per Share (EPS), as well as company size (SIZE) on stock returns in pharmaceutical companies listed on the Indonesia Stock Exchange (IDX) for the period 2019-2024. This study uses a descriptive quantitative approach with secondary data obtained from annual financial reports and the IDX official website. The research sample consists of 48 observations taken from eight pharmaceutical companies using purposive sampling techniques. Data analysis was performed using multiple linear regression tests. The results show that financial performance, represented by ROA, ROE, and EPS, has a significant positive effect on stock returns, as does company size, which shows a positive effect on stock return rates. This indicates that companies with high profitability and large assets are able to send positive signals to investors and generate more stable returns. These findings support the Signaling Theory and Market Efficiency Theory, and provide empirical contributions to the understanding of fundamental factors that affect stock returns in the Indonesian pharmaceutical sector. Practically, the results of this study can be used as a reference for investors and company management in making investment decisions that are oriented towards financial performance and company scale.

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Additional Files

Published

2026-05-09

Issue

Vol. 9 No. 2 (2026): EAJ (Economics and Accounting Journal)

Section

Articles

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Copyright (c) 2026 Tabah Rizki

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