Research Article
Assessing Financial Performance Based On Fundamental Factors From The Perspective Of The Signaling Hypothesis
@INPROCEEDINGS{10.4108/eai.3-10-2019.2291921, author={Yuniningsih Yuniningsih and Eko Purwanto and Bowo Santoso and Siti Aminah and Egan Evanzha Yudha Amriel}, title={Assessing Financial Performance Based On Fundamental Factors From The Perspective Of The Signaling Hypothesis}, proceedings={Proceedings of the 2nd International Conference on Economics, Business, and Government Challenges, EBGC 2019, 3 October, UPN " Veteran" East Java, Surabaya, Indonesia}, publisher={EAI}, proceedings_a={EBGC}, year={2020}, month={2}, keywords={financial performance fundamental factors signaling hypothesis funding banking}, doi={10.4108/eai.3-10-2019.2291921} }- Yuniningsih Yuniningsih
Eko Purwanto
Bowo Santoso
Siti Aminah
Egan Evanzha Yudha Amriel
Year: 2020
Assessing Financial Performance Based On Fundamental Factors From The Perspective Of The Signaling Hypothesis
EBGC
EAI
DOI: 10.4108/eai.3-10-2019.2291921
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.