The Effect of Return on Equity (ROE) and Earning per Share (EPS) on Stock Prices in Indonesia Stock Exchange 2015-2018

This study aims to analyze the source of a company's profitability by choosing two main factors namely, Return on Equity (ROE) and Earning per Share (EPS) as the strength and resilience of companies engaged in food and beverage listed on the Indonesia Stock Exchange. This study uses time series data from 2015 to 2018. The dependent variable is the stock price. Meanwhile the independent variables are Return on Equity (ROE) and Earning per Share (EPS). The determination of the sample uses positive sampling, the sampling technique uses two special criteria from researchers. The first criterion, only food and beverage companies that publish financial statements in full during the period 2015 to 2018, and the second criterion, food and beverage companies that have financial statement data in accordance with the studied variables, namely Return on Equity (ROE) and Earning per Share (EPS). Samples that meet the criteria are 11 registered food and beverage companies on the Indonesia Stock Exchange for the period 2015 to 2018. Data analysis techniques using multiple linear regression with the help of the SPSS program. The findings show that Return on Equity (ROE) has a positive and significant impact on stock prices, while Earning per Share (EPS) has an impact negative and significant to stock prices. This finding confirms that strength the profitability of a company through Return on Equity (ROE) affects the stock prices of food and beverage companies in Indonesia. Therefore, it is important to maintain the company's profitability through Return on Equity (ROE) from the investor's perspective, not from the company's view. Meanwhile, interesting findings from a company's profitability through Earning per Share (EPS) do not affect the stock prices of food and beverage companies in Indonesia. Because earnings per share or earning per share (EPS) is obtained from the perspective of the company's financial statements where there are differences in the size and size of the company's expenses other than earning per share (EPS) can turn out to be high if the number of shares outstanding is reduced.


INTRODUCTION
The current global conditions make it relatively difficult for investors to make investment choices in the types of companies that provide many benefits to their shareholders. Companies that maximize profits show that the company has a correlation with corporate financial indicators such as Return on Equity (ROE) and Earning per Share (EPS). Therefore, company management can design and review the determination of strategies in order to improve the company's financial performance to show better financial indicators (Firdaus, 2020). Good financial indicators will be of interest to investors, especially investing in the Indonesian capital market, because they produce maximum profits (Kai et al., 2018). Therefore, it becomes an important factor in the company's financial fundamentals. The issuer's financial statements can be seen the level of ability of the company's performance to generate profits and the ability of the company to pay debt and how effective and efficient the level of managing company wealth (Fakhri et al., 2020).
For measuring the financial health of a business firm, there are lots of techniques available. But the Altman's Z-score has been proven to be a reliable tool across the globe. This model devotes to predict possibilities of bankruptcy of manufacturing concerns. There is evidence that it has 76.9% accuracy in predicting the bankruptcy of the underlying sample (Begley et al. 1996). Altman (1968) defines five predicted factors that can be used to test the validity of Multivariate model. The model is based on financial ratios. Using financial ratios to predict bankruptcy can be accurate up to 90% (Chen & Shemerda, 1981). Hence, this research aims to bankruptcy prediction using Altman z-Score model in retail trading company in Indonesian.
The research was conducted on 11 food and beverage companies listed on the Indonesia Stock Exchange (IDX) in 2015-2018. Fluctuating capital market conditions today are important because they have an impact on investment interest, even though the number of companies that register increases. The formulation of the problem is proposed based on the business phenomenon and the research gap phenomenon mentioned above, 1) Does Return on equity (ROE) affect stock prices; and 2) Do Earning Per Share (EPS) affect stock prices. While the research objective is to analyze the source of a company's profitability by choosing two main factors, namely, Return on Equity (ROE) and Earning per Share (EPS) as the strength and resilience of companies engaged in food and beverage listed on the Indonesia Stock Exchange. Based on the t test results in Table 1. above, it can be seen that Return on Equity (ROE) (X1) has a positive and significant effect on stock prices, because it has a significance value greater than 0.05 (Sig.0,000>0.05 ). Furthermore Earning per Share (EPS) (X2) has a negative and significant effect on stock prices, because it has a significance value greater than 0.05 (Sig.0.003>0.05).

Effect of Return on Equity (ROE) on Stock Prices
The results of t-test Return on Equity (ROE) (X1) have a positive and significant effect on stock prices that move on food and beverage companies on the Indonesia Stock Exchange can be proven or accepted. The findings show that Return on Equity (ROE) has a positive and significant impact on stock prices. If Return on Equity (ROE) (X1) has increased, then it can be predicted that stock prices will increase. Return on equity (ROE) is a ratio used to measure net income after tax with their capital (Kasmir, 2015). The higher the Return on Equity (ROE), the better, because the position of the owner of the company is getting stronger, so investors can measure the extent of the return on investment they have done (Asraf & Desda, 2020) (Asraf & Desda, 2020). This finding confirms that the strength of a company's profitability through Return on Equity (ROE) can affect the stock prices of food and beverage companies in Indonesia. Therefore, it is important to maintain the company's profitability through Return on Equity (ROE) whose substance is the investor's view, not the company's view. The findings of this study, strengthen the results of empirical studies conducted by (Lumingkewas, 2013); (Sanjaya, 2015); (Riani, 2016); (Sumaryanti, 2017); dan (Nurlia & Juwari, 2019).

Effect of Earning per Share (EPS) on Stock Prices
Test results Earning per Share (EPS) (X2) a significant negative effect on stock prices moving in the food and beverage company in Indonesia Stock Exchange can be proven or acceptable. Findings show that Earning per Share (EPS) has a negative and significant impact on stock prices. An interesting finding is that the profitability of a company through Earning per Share (EPS) does not affect the stock prices of food and beverage companies in Indonesia. Because earnings per share or earning per share (EPS) is obtained from the perspective of the company's financial statements where there are differences in the size and size of the company's expenses other than earning per share (EPS) can turn out to be high if the number of shares outstanding is reduced. Earnings Per Share (EPS) is a form of giving benefits to shareholders from each sheet owned (Fahmi, 2018). Given the high profits to shareholders, the demand for the company's shares will be high. The high demand for shares has an impact on increasing the company's stock price, thus encouraging investor interest to invest (Indriawati & Nurfadillah, 2020). The findings of this study, strengthen the results of empirical studies conducted by (Aning Tyas & Septa Saputra, 2016); (Khairani, 2016); (Sumaryanti, 2017); dan (Andry, 2017).

CONCLUSION
Return on Equity (ROE) has a positive and significant impact on stock prices. If Return on Equity (ROE) (X1) has increased, then it can be predicted that stock prices will increase. The strength of a company's profitability through Return on Equity (ROE) can affect the stock prices of food and beverage companies in Indonesia. Therefore, it is important to maintain the company's profitability through Return on Equity (ROE) whose substance is the investor's view, not the company's view. Furthermore Earning per Share (EPS) does not affect the stock prices of food and beverage companies in Indonesia. Because earnings per share or earning per share (EPS) is obtained from the perspective of the company's financial statements where there are differences in the size and size of the company's expenses other than earning per share (EPS) can turn out to be high if the number of shares outstanding is reduced.
This study is limited to the effect of Return on Equity (ROE) and Earning per Share (EPS) on stock prices engaged in food and beverage companies listed on the Indonesia Stock Exchange. This study also has limited sampling in only 11 companies. It is hoped that further studies will take more samples so that research results can be generalized.