Assessing Financial Performance Based On Fundamental Factors From The Perspective Of The Signaling Hypothesis

Yuniningsih, Yuniningsih and Purwanto, Eko and Santoso, Bowo and Aminah, Siti and Yudha Amriel, Egan Evanzha (2020) Assessing Financial Performance Based On Fundamental Factors From The Perspective Of The Signaling Hypothesis. In: EBGC 2019, 3 October 2019, UPN " Veteran" East Java, Surabaya, Indonesia.

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Abstract

Economic activity will be greatly influenced by how much funding sources are available financial institutions, especially from banks. This study aims to measure how much financial performance of Indonesian banks is influenced by financial fundamental factors. The analytical tool used to test hypotheses is using multiple linear regression. This research has fulfilled the normality test and classic assumptions which were carried out before the hypothesis test. The fundamental variable in this study uses financial performance as measured by Return On Investment (ROI) as the dependent variable. While the independent variables used are Net Interest Margin (NIM), Non Performing Loans (NPL), Loan to Deposit Ratio (LDR), and operational cost and income (CIO). The sample uses secondary data from 25 Indonesian banks listed on the Indonesia Stock Exchange in 2015-2018. The results showed that only the variable cost and operating income (CIO) had a significant influence on the company's financial performance. While the three other fundamental factors from NIM, LDR and NPL have no impact at all on financial performance. These results indicate the limitations of this study that the ratios used do not fully describe the dominant factors in evaluating financial performance.

Item Type: Conference or Workshop Item (Paper)
Uncontrolled Keywords: financial performance fundamental factors signaling hypothesis funding banking
Subjects: H Social Sciences > HB Economic Theory
Depositing User: EAI Editor IV
Date Deposited: 25 Aug 2021 07:01
Last Modified: 25 Aug 2021 07:01
URI: https://eprints.eudl.eu/id/eprint/6222

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