The Impact of Financial Ratios and Corporate Reputation on Stock Prices

Abstract

Introduction/Purpose: Stock prices reflect investors’ expectations of future returns and influence investment decisions. Understanding their determinants is essential for investors. Problem Background: Stock prices are influenced by supply and demand, while financial performance and corporate reputation provide signals regarding company prospects. Novelty: This study incorporates corporate reputation alongside financial ratios to examine their effects on stock prices. Research Method: The sample comprises food and beverage manufacturing companies listed on the Indonesia Stock Exchange (IDX) during 2022–2024. Using purposive sampling, 75 observations from 25 companies were analyzed through multiple linear regression. Findings/Results: Liquidity, solvency, total asset turnover, profitability, price-to-earnings ratio, and corporate reputation simultaneously affect stock prices. Individually, liquidity, total asset turnover, profitability, and corporate reputation positively affect stock prices, whereas solvency and the price-to-earnings ratio have no significant effects. Conclusion: Financial performance and corporate reputation are important determinants of stock prices.