Browse > Article
http://dx.doi.org/10.13106/jafeb.2021.vol8.no8.0067

The Effect of RGEC and EPS on Stock Prices: Evidence from Commercial Banks in Indonesia  

SHOLICHAH, Mu'minatus (Faculty of Economics and Business, University of Muhammadiyah Gresik)
JIHADI, M. (Faculty of Economics and Business, University of Muhammadiyah Malang)
WIDAGDO, Bambang (Faculty of Economics and Business, University of Muhammadiyah Malang)
MARDIANI, Novita (Faculty of Economics and Business, University of Muhammadiyah Malang)
NURJANNAH, Dewi (Faculty of Economics and Business, University of Muhammadiyah Malang)
AULIA, Yoosita (Faculty of Economics and Business, University of Dr. Soetomo Surabaya)
Publication Information
The Journal of Asian Finance, Economics and Business / v.8, no.8, 2021 , pp. 67-74 More about this Journal
Abstract
This study aims to examine and analyze the effect of Risk Profile, Good Corporate Governance (GCG), Earnings, Capital (RGEC), and Earnings per Share (EPS) on stock prices with financial distress as an intervening variable. The sampling technique used purposive sampling based on certain criteria and data used was secondary data, that is, annual reports of commercial banks in Indonesia for the period of 2012-2018 with a sample of 23 banks from a total population of 81 banks. This type of research is explanative with a quantitative descriptive approach to describe or explain quantitative data. The data obtained was analyzed using SEM (Structural Equation Model) with the AMOS Program. The results showed that RGEC, EPS, and financial distress affect stock prices. This is based on testing the direct effect as indicated by a p-value that is smaller than 0.05. Based on the mediation test, the results show that financial distress cannot mediate the effect of RGEC and EPS on stock prices as indicated by a p-value greater than 0.05. The implication of this research is very important for investors to analyze stock price changes based on RGEC, EPS, and financial distress to gain profits. In addition, there are various warning signs indicating that a company is experiencing financial distress or it is heading towards such a state. Being aware of these signs can help prevent failure.
Keywords
Commercial Banks; Earning Per Share; Financial Distress; RGEC; Stock Prices;
Citations & Related Records
연도 인용수 순위
  • Reference
1 Byrne, B. M. (2001). Structural equation modeling with AMOS, EQS, and LISREL: Comparative approaches to testing for the factorial validity of a measuring instrument. International Journal of Testing, 1(1), 55-86. https://doi.org/10.1207/S15327574IJT0101_4   DOI
2 Dewi, I. (2016). The effect of bank soundness level variable on banking stock prices on the Indonesia stock exchange. E-Jurnal Manajemen Unud, 5(5), 2756-2785. https://ojs.unud.ac.id/index.php/Manajemen/article/view/20275
3 Erawati, P., & Pratama, A. (2014). Effect of current ratio, debt to equity ratio, return on equity, net profit margin, and earning per share on stock prices: A case study on manufacturing companies listed on the Indonesia stock exchange period 2008 2011. Jurnal Akuntansi, 2(1), 1-10. https://jurnalfe.ustjogja.ac.id/index.php/akuntansi/article/view/20
4 Febiolla, M. A. (2019). The effect of banking soundness on the stock prices of banking companies on the IDX in 2008-2017. Perspektif Akuntansi, 1(2), 211-236. https://doi.org/10.24246/persi.v1i2.p211-236   DOI
5 Sobel, M. E. (1982). Asymptotic confidence intervals for indirect effects in structural in equation models. Journal Storage, 13, 290-312. https://doi.org/10.2307/270723   DOI
6 Irama, O. N. (2018). The effect of bankruptcy potential on stock prices in manufacturing companies listed on the Indonesia stock exchange. Jurnal Bisnis Net, 1(1), 87-95. https://jurnal.unimed.ac.id/2012/index.php/karmapsi/article/view/14235/11728
7 Fitrawati, S. Z. (2016). Application of RGEC approach (risk profile, good corporate governance, earnings, and capital) in analyzing bank performance to determine bank soundness level: A case study of PT. Bank Tabungan Negara Persero Tbk. 2013-2015 period. Jurnal Administrasi Bisnis, 37(1), 29-36. http://administrasibisnis.studentjournal.ub.ac.id/index.php/jab/article/view/1424
8 Gebreslassie, E. (2015). Determinants of financial distress conditions of commercial banks in Ethiopia: A case study of selected private commercial banks. Journal of Poverty, Investment and Development, 13, 59-73. https://www.iiste.org/Journals/index.php/JPID/article/view/23400
9 Hair, J. F. (1998). Multivariate data analysis (5th ed.). Upper Saddle River, NJ: Prentice-Hall.
10 Wismaryanto, S. D. (2013). The influence of NPL, LDR, ROA, ROE, NIM, BOPO, and CAR on stock prices in banking sub-sectors listed on the Indonesia stock exchange in 2008-2012. Jurnal Manajemen, 3(1), 29-60. https://jurnalfe.ustjogja.ac.id/index.php/manajemen/article/view/152
11 Nariman, A. (2016). Bankruptcy prediction analysis and stock prices in coal mining companies. Jurnal Riset Akuntansi & Komputerisasi Akuntansi, 2(2), 141-155. http://doi.org/10.29264/jiam.v3i3.1817   DOI
12 Jihadi, M., Vilantika, E., Widagdo, B., Sholichah, F., & Bachtiar, Y. (2021). Islamic social reporting on the value of the firm: Evidence from Indonesia sharia stock index. Cogent Business & Management, 8(1), 116-121. https://doi.org/10.1080/23311975.2021.1920116   DOI
13 Khairani, I. (2016). The effect of earning per share (EPS) and dividend per share on the share price of mining companies listed on the Indonesia stock exchange (IDX) in 2011-2013. Jurnal Manajemen Dan Keuangan, 5(1), 566-572. https://ejurnalunsam.id/index.php/jmk/article/view/75
14 Kline, R. B. (2004). Principles and practice of structural equation modeling (2nd ed.). New York: Guilford Press.
15 Wibowo, R. (2015). Analysis of the potential occurrence of financial distress in Islamic commercial banks (BUS) in Indonesia. Jurnal Ekonomi dan Perbankan Syariah, 3(1), 1-20. https://doi.org/10.46899/jeps.v3i1.151   DOI
16 Permata, P. (2018). Analysis of distress financial condition toward the stock price of manufacture company in the period of 2012-2016. The International Journal of Engineering and Science, 7(10), 64-69. https://doi.org/10.9790/1813-0710036469   DOI
17 Sadida, B. D. (2018). Risk profile, good corporate governance, earnings, and capital (RGEC) as predictors of financial distress conditions in banking companies. Jurnal Manajemen Bisnis Indonesia Edisi, 4, 347-357. http://journal.student.uny.ac.id/ojs/index.php/jmbi/article/view/12926
18 Warsa, M.I. U. P., & Mustanda, K. (2016). Effect of CAR, LDR and NPL on ROA in the banking sector on the Indonesia stock exchange. E-Jurnal Manajemen Unud, 5(5), 2842-2870. https://ojs.unud.ac.id/index.php/Manajemen/article/view/18244
19 Polii, S. M. (2014). Financial ratios influence stock prices in public-private national foreign exchange banks that go public on the Indonesia Stock Exchange. Jurnal Riset Ekonomi, Manajemen, Bisnis & Akuntansi, 2(2), 993-1004. https://doi.org/10.35794/emba.v2i2.4468   DOI
20 Noviantari, W. S. (2017). Effect of bank soundness level with RGEC method (riks profile, good corporate governance, earning, capital) on stock return: A case study on foreign exchange national private commercial banks listed on the Indonesia stock exchange 2013-2015 period. e-Journal Universitas Pendidikan Ganesha, 8(2), 1-11. http://doi.org/10.23887/jimat.v8i2.11055   DOI
21 Sukesti, G., Imam, G., Fuad, F., Almasyhari, K. R., & Nurcahyono,N. (2021). Factors affecting the stock price: The role of firm performance. Journal of Asian Finance, Economics, and Business, 8(2), 165-173. https://doi.org/10.13106/jafeb.2021.vol8.no2.0165   DOI
22 Iskander, B. A., & Laila, I. (2016). The influence of risk-based bank rating components on profitability of islamic commercial banks in Indonesia (2011-2014 period). Jurnal Ekonomi Syariah Teori dan Terapan, 2(3), 173-186. http://doi.org/10.20473/vol3iss20163pp173-186   DOI
23 Nurdin, Q. (2019). Analysis of the RGEC model (risk profile, good corporate governance, earnings, and capital) in knowing the potential for financial distress in Islamic commercial banks for the 2012-2017 period. Prosiding Manajemen, 5(1), 89-93. http://karyailmiah.unisba.ac.id/index.php/manajemen/article/view/15813
24 Widagdo, B., Jihadi, M., Safitri, O. E., & Singh, S. K. (2020). Financial ratio, macroeconomy, and investment risk on sharia stock return. Journal of Asian Finance, Economics, and Business, 7(12), 919-926. https://doi.org/10.13106/jafeb.2020.vol7.no12.919   DOI
25 Yasa, H. (2015). The effect of RGEC components on changes in stock prices of banking companies on the Indonesia Stock Exchange. E-Jurnal Akuntansi Universitas Udayana, 11(1), 74-89. https://ojs.unud.ac.id/index.php/Akuntansi/article/view/10312