In financial analysis has a very important meaning as one of the comprehensive financial
analysis techniques.
Return on investment is one form of profitability ratio which is intended to be able to measure
the company's ability with all funds invested in assets used for company operations.
Net operating income with amount of investment or assets used to generate these operating
profits while earning per share is the company's income from each share sold.
X is obtained from the division between profit after tax and the number of shares.
By considering X, investors can consider investing in the capital market.
To a conclusion that earning per share X has a significant positive effect on stock
prices.
The reasons researchers take the level of earning per share and return on investment
as variables are first, the company's ability to generate net income per share and the company's
ability to distribute dividends are indicators of the company's financial fundamentals represented
by the return on investment ratio which is often used as a reference for making investment
decisions in stocks.
Second, the development of the capital market in Indonesia towards an efficient direction
where all relevant information can be used as input to assess stock prices.