Correlation between Financial Performances with the Stock Price in Indonesia Stock Exchange on Telecommunication Industry for 2017-2021 (Case Study: PT Telkom, PT XL Axiata, PT Indosat Ooredoo)

Abstract

Over the past few decades, telecommunication in Indonesia has experienced enormous growth and development, playing a crucial role in supporting the advancement of society, economic prosperity, and human connectivity. A couple major companies dominate the market including PT Telekomunikasi Indonesia and private firms like PT Indosat Ooredoo and PT XL Axiata. These companies provide a wide range of services, including mobile phone service, fixed-line services, internet connectivity, and digital solutions, adapting to the diverse needs of businesses and individuals across the country. The purpose of this research is to determine how financial ratios affect stock prices on the Indonesian stock exchange. Additionally, this study compares the financial health of PT Telekomunikasi Indonesia, PT Indosat Ooredoo, and PT XL Axiata based on ratio comparison of Decree No. KEP-100/MBU/2002. The results indicates that PT Telekomunikasi Indonesia has the healthiest financial performance by obtained AA category compared to PT Indosat Ooredoo and PT XL Axiata. This study finds the effect of eight financial ratios on the telecommunication industry for five years period. Based on the multiple linear regression test namely T test, it resulted that total asset turnover and total equity have a positive significant effect on stock price partially with a value less than 0.05. The F tests shows that all independent variables have effect to the stock prices by 80% and the remaining 20% are influenced by models outside this study.