Profitability Performance and Its Impact on Stock Prices in Indonesia’s Food and Beverage Sector (2022–2024)

Abstract

This study aims to analyze the effect of profitability on stock prices of food and beverage companies listed on the Indonesia Stock Exchange during the 2022–2024 period. Profitability is measured using financial ratios such as Return on Assets (ROA), Return on Equity (ROE), and Net Profit Margin (NPM). The data were obtained from the annual financial reports of the companies included in the research sample. The analytical method employed is simple linear regression to examine the relationship between profitability variables and stock prices. The results of the study show that profitability has a significant effect on stock prices. The higher the level of a company’s profitability, the higher the stock price recorded in the market. These findings reinforce the signaling theory, where good financial performance serves as a positive signal for investors and leads to increased demand for the company’s shares in the capital market. This study is expected to provide contributions to both investors and company management in making investment decisions and strategies to improve financial performance.