Analysis of the Effect of Asset Management and Profitability on Stock Prices in the Open Construction Industry in the Indonesia Stock Exchange

Oct 13, 2025 by vinooalluri.com 71 views

Analysis of the Effect of Asset Management and Profitability on Stock Prices in the Open Construction Industry in the Indonesia Stock Exchange

Introduction

The Indonesia Stock Exchange (IDX) is one of the largest stock exchanges in Southeast Asia, with a wide range of companies listed across various industries. The construction industry is one of the key sectors in the IDX, with many companies involved in various aspects of construction, such as building, infrastructure, and real estate development. The performance of construction companies on the IDX is influenced by various factors, including asset management and profitability. This study aims to examine the effect of asset management and profitability on stock prices in the open construction industry in the Indonesia Stock Exchange.

Literature Review

Asset management and profitability are two critical factors that affect the performance of companies listed on the IDX. Asset management refers to the efficient use of assets to generate revenue and reduce costs. Profitability, on the other hand, refers to the ability of a company to generate profits from its operations. Previous studies have shown that asset management and profitability have a significant impact on stock prices in various industries, including construction.

Research Hypothesis

The research hypothesis of this study is: "Inventory turnover, day sales outstanding, fixed asset turnover, total asset turnover (asset management) and return on assets, return on equity (profitability) simultaneously and partially affect stock prices in the open construction industry in the stock exchange Indonesia." This hypothesis is tested using multiple linear regression analysis, with the F test and T test used to determine the effect of independent variables on the dependent variable at a 95% confidence level (α = 0.05).

Methodology

The data used in this study are obtained from the IDX and cover a period of five years (2015-2019). The sample consists of 20 construction companies listed on the IDX, with a total of 100 observations. The variables used in this study are inventory turnover, day sales outstanding, fixed asset turnover, total asset turnover, return on assets, return on equity, and stock prices.

Results

The analysis results show that asset management simultaneously has a significant influence on stock prices with a significant level of 0.019. R Square (R²) Asset management to stock prices is 0.365, which means the ability to variation explains inventory turnover, day sales outstanding, fixed assets turnover, total asset turnover to stock prices of 36.5%. The rest of the percentage is a factor that is not included in this study.

Simultaneous profitability also has a significant effect on stock prices with a significant level of 0.049. R Square (R²) Profitability of stock prices is 0.200, meaning the ability to variation explains the return on asset and return on equity to the stock price of 20%. The rest of the percentage is a factor that is not included in this study.

Asset and profitability management is declared significant effect on stock prices because it has a significant level of smaller than α 0.05.

Asset management partial test results show that the inventory turnover variable has a significant effect on stock prices with a significant level of 0.025. This variable is the most influential variable on stock prices. Day Sales Outstanding, Fixed Assets Turnover and Total Assets Turnover have no significant influence on stock prices.

Profitability partial test results show that ROA has no significant influence on stock prices. ROE has a significant influence on stock prices with a significant level of 0.016.

Conclusion

The conclusion of this study is that asset management and profitability have a significant effect on stock prices. Variables inventory turnover and ROE have a significant influence on stock prices in the open construction industry on the Indonesia Stock Exchange.

Implications and Recommendations

The results of this study have several implications and recommendations for investors, construction companies, and capital market regulators:

Investors: Investors need to consider asset management and profitability as an important factor in choosing the shares of construction companies.
Construction Company: Construction companies need to increase the efficiency of asset management and profitability to increase the value of their shares.
Capital Market Regulator: Capital Market Regulator needs to consider providing further guidance on asset management and profitability for construction companies listed on the IDX.

Deeper Analysis

It is important to note that this research only examines the effect of asset management and profitability on stock prices. Other factors such as macroeconomic conditions, government policies, and competition in the construction industry can also affect stock prices.

Further research can be done to examine the effect of these factors on the stock price of construction companies. In addition, research can also be focused on the analysis of the influence of the company's internal factors such as capital structure, quality of management, and business strategies.

Development of more accurate stock price prediction models can be done by including the factors mentioned above. This prediction model can help investors in making more appropriate investment decisions.

Limitations of the Study

This study has several limitations. Firstly, the sample size is relatively small, with only 20 construction companies listed on the IDX. Secondly, the data used in this study are only for a period of five years, which may not be representative of the long-term performance of construction companies. Finally, the study only examines the effect of asset management and profitability on stock prices, and does not consider other factors that may affect stock prices.

Future Research Directions

Future research can be done to examine the effect of other factors on stock prices, such as macroeconomic conditions, government policies, and competition in the construction industry. In addition, research can also be focused on the analysis of the influence of the company's internal factors such as capital structure, quality of management, and business strategies.

Conclusion

In conclusion, this study examines the effect of asset management and profitability on stock prices in the open construction industry in the Indonesia Stock Exchange. The results show that asset management and profitability have a significant effect on stock prices, with variables inventory turnover and ROE having a significant influence on stock prices. The implications and recommendations of this study are that investors, construction companies, and capital market regulators need to consider asset management and profitability as an important factor in choosing the shares of construction companies. Further research can be done to examine the effect of other factors on stock prices and to develop more accurate stock price prediction models.
Q&A: Analysis of the Effect of Asset Management and Profitability on Stock Prices in the Open Construction Industry in the Indonesia Stock Exchange

Frequently Asked Questions

Q1: What is the main objective of this study?

A1: The main objective of this study is to examine the effect of asset management and profitability on stock prices in the open construction industry in the Indonesia Stock Exchange.

Q2: What are the variables used in this study?

A2: The variables used in this study are inventory turnover, day sales outstanding, fixed asset turnover, total asset turnover, return on assets, return on equity, and stock prices.

Q3: What is the significance of this study?

A3: This study is significant because it provides insights into the relationship between asset management, profitability, and stock prices in the open construction industry in the Indonesia Stock Exchange. The findings of this study can help investors, construction companies, and capital market regulators make informed decisions.

Q4: What are the implications of this study?

A4: The implications of this study are that investors, construction companies, and capital market regulators need to consider asset management and profitability as an important factor in choosing the shares of construction companies.

Q5: What are the limitations of this study?

A5: The limitations of this study are that the sample size is relatively small, the data used in this study are only for a period of five years, and the study only examines the effect of asset management and profitability on stock prices.

Q6: What are the future research directions?

A6: Future research can be done to examine the effect of other factors on stock prices, such as macroeconomic conditions, government policies, and competition in the construction industry. In addition, research can also be focused on the analysis of the influence of the company's internal factors such as capital structure, quality of management, and business strategies.

Q7: How can this study contribute to the development of more accurate stock price prediction models?

A7: This study can contribute to the development of more accurate stock price prediction models by including the factors mentioned above, such as macroeconomic conditions, government policies, and competition in the construction industry.

Q8: What are the benefits of this study for investors?

A8: The benefits of this study for investors are that it provides insights into the relationship between asset management, profitability, and stock prices in the open construction industry in the Indonesia Stock Exchange. This can help investors make informed decisions when choosing the shares of construction companies.

Q9: What are the benefits of this study for construction companies?

A9: The benefits of this study for construction companies are that it provides insights into the importance of asset management and profitability in increasing the value of their shares.

Q10: What are the benefits of this study for capital market regulators?

A10: The benefits of this study for capital market regulators are that it provides insights into the importance of asset management and profitability in regulating the construction industry.

Conclusion

In conclusion, this Q&A article provides insights into the analysis of the effect of asset management and profitability on stock prices in the open construction industry in the Indonesia Stock Exchange. The questions and answers in this article provide a comprehensive overview of the study, its significance, implications, limitations, and future research directions.