JRSSEM 2023, Vol. 02, No. 6, 1139 – 1145

E-ISSN: 2807 - 6311, P-ISSN: 2807 - 6494

DOI : 10.36418/jrssem.v2i06.369 https://jrssem.publikasiindonesia.id/index.php/jrssem

FINANCIAL PERFORMANCE AND RISK

Rizal Rahmawan

1

Armi Bakar

2

1

STIE Tunas Nusantara, Indonesia

2

UNIV. Indraprasta PGRI Jakarta, Indonesia

*

e-mail: ri[email protected]d, armibakar@stietn.ac.id

*Correspondence: rizal@stietn.ac.id

Submitted

: 20

th

December 2022

Revised

: 16

th

January 2023

Accepted

: 25

th

January 2023

Abstract: When it comes to consumer-goods companies in particular, having shareholders who

invest in the company's stock is a major factor in the company's success. In which the investors

naturally demand return of their money. Where annual financial reports provide shareholders with

a window into firm performance and allow them to steer its future direction. However, in the

process of developing any organization, there are a number of dangers that must be dealt with

quickly so as to not have a long-lasting unfavorable influence. This is why the effects of financial

performance and risk on stock returns of consumer goods companies listed on the Indonesia Stock

Exchange for the period 2016-2021 is of interest to scholars. The research aims to answer the

question, "Does financial performance and risk affect the stock returns of companies listed on the

IDX?" over the time period of 2016-2021, with a focus on the consumer products industry.

Methodologically, this study employs descriptive quantitative methodologies for data collecting by

way of audited financial accounts. Purposeful sampling was used to choose 50 participants. SPSS

17 was used to do the statistical analysis on the gathered data. with the results that CR, DER, ROA,

and risk have an influence on stock returns even though the levels of influence are different. Current

ratio and DER have a negative and insignificant effect. While ROA and Risk have a positive and

significant influence. While the effect value is 89.3%.

Keywords: financial performance; risk; stock return; and IDX.

1141 | Financial Performance and Risk

INTRODUCTION

It has become commonplace for

entrepreneurs to develop their companies

by attracting stock growers to invest in

shares. If the quality of the company is high,

the stock price will also rise, and vice versa,

if the quality of the company falls, the stock

price will also fall. This is because the

existence of the capital market can be used

as an alternative to finding sources of funds

for companies provided by stock growers

(Umar et al., 2022)

The shares given by the shareholders

who are then referred to as shareholders

will be developed by the company, and in

time the stock growers will conduct a

sharer-return (Goddess, 2018) on the funds

that have been given to the company

(Nazulaikah, 2022). Stock planting is usually

done by people who have more funds to

companies that are experiencing a lack of

funds, where these funds will then be used

to develop the company as it aims.

The development of the company's

performance can be seen or accessed

through the financial performance reports

issued annually where the financial

statements contain the financial condition

or funds owned by each company

(Puspitasari, 2021). (Lovian et al., 2022).

These financial statements must be

reported carefully to find out the real state

of the company to continue to develop and

carry out its performance.

This also happens to consumer goods

companies that take part in the basic needs

of the community (Indriawati et al., 2022).

This type of company in Indonesia has quite

good potential considering that Indonesia

is a country that has a fairly dense

population so consumer goods in basic

needs are of course always increasing in

need (Lestari & Pangestuti, 2022).

Therefore, not a few shareholders

invest in this sector company in the hope of

receiving a large enough stock return.

However, it is not impossible if every

movement of the company related to

financial factors has risks that must be

handled immediately so as not to have

prolonged negative effects. Therefore,

researchers want to find out more about

the Effect of Financial Performance and Risk

on Stock Returns of Consumer Goods

Sector Companies on the Indonesia Stock

Exchange for the 2016-2021 Period. The

purpose of this study is to determine

whether or not there is an effect of financial

performance and risk on the company's

stock returns.

Researchers hope that the results of

this study can provide understanding to all

readers to be used as a reference in

carrying out various actions both for

themselves and many people, especially in

managing companies. Where the progress

of the company is of course a dream for

company holders, shareholders, and even

employees to continue to have an existence

in their lives. Considering that Indonesia is

a densely populated country with a fairly

high number of employment needs. If a

company goes out of business, it will

certainly increase the number of

unemployed in Indonesia which can make

things worse and various other sectors.

MATERIALS AND METHODS

Material

There are several things that need to

be understood in this study, namely:

Rizal Rahmawan

1

Armi Bakar

2

| 1142

1. Financial performance

Cashing performance is

described as one of the ways used

to determine the quality of financial

management in a company (Yuliana

& Artati, 2022), which refers to the

rules that have been set. There are

several types of financial

performance used in this study,

namely:

a. Current Ratio (CR) is knowledge

of the company's finances in

completing its responsibilities

in the form of debt receivable

needs if it has arrived at the

time of its payment (Nindiana,

2022).

b. Debt to Equity Ratio (DER) is a

condition used to determine

the collateral owned by the

company for creditors (Siahaan

& Rasmara, 2021).

c. Return on Assets (ROA) is a

ratio used to determine the

results or returns owned by the

company based on the number

of assets (Fitroh & Fauziah,

2022).

2. Risk, which is a deviation owned by

the company where this is possible

can occur when carrying out

company development to obtain

real achievements (Jesika et al.,

2021).

3. Stock Return, is the process of

withdrawing shares carried out by

shareholders or stock growers in a

capital market as a form of the

result of the investment they make

(Ayuningrum et al., 2021)

((Herlambang & Kurniawati, 2022).

4. Consumer goods industry, is a

company that is involved in the

basic needs sector of the

community (Liu & Cuandra, 2022).

Method

This study uses a descriptive

quantitative type, where data collection is

carried out through documentation on the

financial performance of consumer goods

companies that can be accessed through

www.idx.co.id and regarding stock prices

on the www.financeyahoo.com page. The

number of respondents in this study was 50

selected by purposive sampling, namely

consumer goods sector companies listed

on the IDX in 2016-2021. The data obtained

will then be analyzed in depth through

SPSS 17 with regression tests.

Research hypothesis

H1 : Financial performance and risk have an

effect on stock returns

H0 : Spatial performance and risk do not

affect stock returns

RESULTS AND DISCUSSION

After data analysis, the following results are

known:

Normatity test

This test is used to determine the

distribution of normally distributed data or

not. Normality test results as follows:

1143 | Financial Performance and Risk

Table 1. Normality test data

One-Sample Kolmogorov-Smirnov Test

Unstan

dardize

d

Residual

N

50

Normal

Parameters

a,,b

Mean

.000000

0

Std. Deviation

1.53480

238

Most Extreme

Differences

Absolute

.157

Positive

.156

Negative

-.157

Kolmogorov-Smirnov Z

1.110

Asymp. Sig. (2-tailed)

.170

a. Test distribution is Normal.

b. Calculated from data.

The above data shows that if the Sig

value > 0.05 then the data is normally

distributed.

Multicholinearity test

This test is used to gain knowledge on

the state of the data on whether or not to

experience symptoms of multicollinearity.

Table 2. Multikilinearity test data

Coefficients

a

Model

Unstandar

dized

Coefficient

s

Stan

dardi

zed

Coef

ficie

nts

t

Itself.

Collinearit

y Statistics

B

Std.

Error

Beta

Toler

ance

BRIG

HT

(Cons

tant)

32.0

29

6.85

9

4.669

.000

Curre

nt_Ra

tio

-.073

.079

-.067

-.914

.365

.446

2.24

4

Debt_

to_eq

uity_r

atio

-.077

.093

-.085

-.831

.410

.227

4.40

2

Retur

n_on_

Asset

s

.254

.099

.386

2.575

.013

.106

9.46

8

Risk

.585

.149

.678

3.837

.000

.180

9.49

3

a. Dependent Variable: Rturn_Saham

The data above shows that the

tolerance value of each aspect>0.10 with a

VIF of <10.00 then the data does not

experience symptoms of multicholinearity.

Regression test

This test is used to test or test research

hypotheses. Regression test results are as

follows:

Rizal Rahmawan

1

Armi Bakar

2

| 1144

Table 3. Coefficients

Coefficients

a

Model

Unstandardiz

ed

Coefficients

Standar

dized

Coeffici

ents

t

Itself.

B

Std.

Error

Beta

1

(Consta

nt)

32.029

6.85

9

4.66

9

.000

Current

_Ratio

-.073

.079

-.067

-.914

.365

Debt_to_e

quity_ra

tio

-.077

.093

-.085

-.831

.410

Return_

on_Asse

ts

.254

.099

.386

2.57

5

.013

Risk

.595

.151

.678

3.93

7

.000

a. Dependent Variable: Rturn_Saham

The data above shows that CR, DER, ROA,

and risk have an effect on stock returns

even though the degree of influence varies.

Current ratio and DER have a negative and

insignificant influence. Meanwhile, ROA

and Risk have a positive and significant

influence because of the value of Sig<0.05.

Table 4. Model Summary

Model Summary

Mo

del

R

Square

Adjusted

R Square

Std. Error of

the Estimate

1

.945

a

.893

.884

1.60156

a. Predictors: (Constant), Risiko,

Current_Ratio, Debt_to_equity_ratio,

Return_on_Assets

The table above shows that the

performance of the company described

through CR, DER, and Ratio as well as risk

factors has an influence of 89.3% on the

return of shares in the company.

With this it is known that H1 is

accepted and H0 is rejected. As research

conducted by Meutia Dewi, in 2018 where

she stated that financial performance and

risk had an influence on the return on

shares of consumer goods companies listed

on the IDX in 2012-2016 (Goddess, 2018).

The same thing was also conveyed by

Maldio Siahaan and Tita Lia Rasmara with

the same results and companies only in

different years, namely the company was

listed on the IDX in 2016-2019 (Siahaan &

Rasmara, 2021).

Based on the data above, it is

important for each company to pay

attention to the movement of the

company's finances and stock prices to

continue to improve the quality and

existence of the company's performance by

continuing to pay attention to every

important component such as human

resources, quality of tools, product nausea,

and so on.

This is because, without the control

exercised by the company's leadership, it is

not impossible if the financial statements

submitted are not in accordance with the

existing circumstances in the company so

that they can make things worse and cause

a variety of unwanted losses.

CONCLUSIONS

The results of the study show that H1

is accepted and H0 is rejected, meaning

that the financial performance studied

1145 | Financial Performance and Risk

through CR, ROA, and DER also risks

affecting stock returns in the companies

studied, namely consumer goods

companies listed on the IDX in 2016-2021

with a value of 89.3%.

With this, every shareholder and

company manager must continue to

monitor and control the performance of

company components to reduce the

occurrence of various negative risks to

existing financial factors, because this can

be fatal to the company's operations.

On the other hand, researchers hope

that the results of this study can be used as

one of the basis for conducting the

following research or used as one of the

guidelines in determining various policies.

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under the terms and conditions of the Creative

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(https://creativecommons.org/licenses/by-sa/4.0/).