RETURN ON ASSETS AND CURRENT RATIO AS DETERMINANTS OF PALM OIL PLANTATION STOCK PRICES IN ISSI 2013-2024

Abstract

This study examines how Return on Assets (ROA) and Current Ratio (CR) influence stock prices among palm oil plantation companies listed on the Indonesian Sharia Stock Index (ISSI) from 2013 to 2024. The research was motivated by observed inconsistencies between theoretical predictions and actual market behavior, where improvements in financial ratios do not consistently correspond with rising share prices. A quantitative descriptive approach was employed, utilizing panel data from three corporations (PT Astra Agro Lestari Tbk, PT Austindo Nusantara Jaya Tbk, and PT Sampoerna Agro Tbk) selected through purposive sampling methodology. The analytical framework incorporated panel data regression using the Fixed Effect Model (FEM), processed through EViews 13 software. Individual variable analysis revealed that ROA demonstrates a statistically significant positive relationship with stock prices, with a coefficient of 38,821.72 (p-value 0.0116 < 0.05), suggesting that each 1% increment in ROA corresponds to a Rp388.22 increase in share value. Conversely, CR exhibits a statistically significant negative relationship, with a coefficient of -2,257.21 (p-value 0.0017 < 0.05), implying that excessive liquidity is interpreted by market participants as inefficient working capital management. Combined analysis demonstrates that ROA and CR jointly exert significant influence on stock prices, with an R² value of 85.50% (p-value 0.000000 < 0.05). These findings validate signaling theory in relation to ROA and trade-off theory concerning CR within the palm oil plantation industry operating in Indonesia's sharia-compliant capital market. This research contributes empirical evidence toward understanding the dynamics between financial performance metrics and market valuation within the sharia-compliant agribusiness sector.