How to Cite Wulansari, T., Sulastri, S., Widiyanti, M., & Adam, M. (2023). The effect of financial ratio on stock price in telecommunications sector companies listed on the Indonesia stock exchange. International Journal of Business, Economics & Management, 6(1), 1- 9. https://doi.org/10.21744/ijbem.v6n1.2058 ISSN 2632-9476 Submitted: 09 October 2022 |Revised: 18 November 2022 | Accepted: 27 December 2022 1 The Effect of Financial Ratio on Stock Price in Telecommunications Sector Companies Listed on the Indonesia Stock Exchange Tri Wulansari Master of Management, Economic Faculty, Sriwijaya University, Palembang, Indonesia Corresponding author email: triwulansari93@gmail.com Sulastri Lecturer of Magister Management, Economic Faculty, Sriwijaya University, Palembang, Indonesia Email: sulastri2310@gmail.com Marlina Widiyanti Lecturer of Magister Management, Economic Faculty, Sriwijaya University, Palembang, Indonesia Email: marlinawidiyanti68@yahoo.co.id Mohamad Adam Lecturer of Magister Management, Economic Faculty, Sriwijaya University, Palembang, Indonesia Email: mr_adam88@unsri.ac.id Abstract---This study aims to determine the effect of financial ratios on stock prices in telecommunications sector companies listed on the Indonesia Stock Exchange (IDX) during the 2017-2021 period. The population in this study were all telecommunications sector companies listed on the Indonesia Stock Exchange (IDX) from 2017 to 2021. Using a purposive sampling technique, the research sample consisted of 10 telecommunications sector companies. Data analysis used the panel data regression method, where the selected model was the fixed effect. The results showed that the Current Ratio (CR), Return on Equity (ROE), Return on Assets (ROA), and Earning Per Share (EPS) had a positive and significant effect on stock prices. In contrast, the Debt to Equity Ratio (DER) was negative and significant to stock prices. Keywords---current ratio, financial ratios, return on assets, return on equity, stock prices. Introduction The development of the economy in Indonesia must be balanced with the development of the capital market in Indonesia. The more advanced and developed the capital market in Indonesia, the more the economy will be pushed forward and developed. The capital market is a place to invest for those who have excess funds (investors) and those who lack funds (issuers) to obtain additional capital for their companies. Investing in shares in the capital market is very attractive to investors because it promises two benefits in investing in shares in companies that have gone public: dividends and capital gains. For companies going public, the capital market is a means for increasing companies by providing capital facilities and is used to increase company value through information provided by companies going public to investors (Megawati, 2018). The development of the capital market in Indonesia can be seen from the increasing number of investors in the Indonesian capital market from year to year. Based on data released by the Financial Services Authority (OJK) in January 2022, there were 7.49 million investors by the end of 2021. The number of capital market investors increased by 93% in 2021. Company performance can influence stock price movements in the capital market. The share price is a function of the firm's value. If the performance of the company going public increases, the value of