Abstract :
This study aims to determine the effect of fundamental analysis on Stock Returns of Banking Companies. The object of this research is Banking Companies in the period 2018-2022. The population of this study was 47 companies. The sampling method in this study used purposive sampling method. The data analysis method uses SMART-PLS. The results showed that Current Ratio, Earning Per Share were confirmed as indicators of fundamental analysis variables. Return On Assets is confirmed as an indicator of the fundamental analysis variable with the largest outer loadings value compared to other indicators. Meanwhile, Debt to Equity Ratio is not confirmed as an indicator of the fundamental analysis variable. In the Stock Return indicator, Average Rate of Return is confirmed as an indicator of the Stock Return variable. Meanwhile, the Internal Rate of Return is not confirmed as an indicator of the Stock Return variable. In signal theory, it is important for companies to send accurate and reliable signals to investors. Positive signals such as high ROA or ARR that exceed market expectations can increase investor confidence in the company or investment. Conversely, negative signals such as low ROA or ARR below market expectations can raise doubts and reduce investor interest.
Keywords: Current Ratio, Earning Per Share, Return On Assets, Debt to Equity Rati, Stock Returns