The INFLUENCE OF PROFITABILITY, CASH FLOW, AND STOCK RETURNS ON EQUITY MARKET VALUES BASED ON COMPANY LIFE CYCLE (Study of Manufacturing Companies Listed in Indonesian stock exchange)

Keywords: Equity market values, company life cycle, profitability, cash flow, and stock returns.

Abstract

The purpose of this study is to examine the effect of profitability, cash flow, and stock returns on equity market values based on company life cycle of manufacturing companies listed in Indonesian Stock Exchange over the period of 2012-2014. The data used in this study were obtained from audited financial reports which published by the capital market reference center on the Indonesian Stock Exchange. The type of this research is the hypothesis testing which is applied the purposive sampling method and there are 204 samples of the company as the research object. The results of the study indicate that simultaneous profitability variables, cash flow, and stock returns have a positive effect on equity market values ​​regarding the company's life cycle. While, in the partial test the results of the study point that (1) Profitability at the stage of growth, mature and decline have a positive effect on equity market value. (2) The operating cash flow at the stage of growth, mature and decline have a positive effect on equity market value. (3) Investment cash flow at the stage of growth, mature and decline have a positive effect on equity market value. (4) Financing cash flow at the stage of growth, mature have a positive effect on equity market value while the decline stage has a negative effect on equity market value. (5) The stock returns at the stage of growth and maturity have a positive effect on equity market value while at the decline stage has a negative effect on equity market value.

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Published
2019-02-20
How to Cite
Saputra, M., nurjannah, N., & darwanis, D. (2019). The INFLUENCE OF PROFITABILITY, CASH FLOW, AND STOCK RETURNS ON EQUITY MARKET VALUES BASED ON COMPANY LIFE CYCLE (Study of Manufacturing Companies Listed in Indonesian stock exchange). Journal of Research in Business, Economics and Management, 12(2), 2314-2321. Retrieved from http://scitecresearch.com/journals/index.php/jrbem/article/view/1697
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