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Business Economics - Regression Analysis

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Business Economics - Regression Analysis
Effect of Ratio Profitability: Return on Asset (ROA) and Return of Equity (ROE) to Stock Price of PT Bank Central Asia (BCA) Tbk.

Ratio profitability, Return on Asset (ROA) and Return of Equity (ROE), of a firm is used as one of parameters for investor to decide whether they want to invest or not. The following table consists of ROA and ROE as well as the stock price of PT Bank Central Asia (BCA) Tbk., as one of the largest bank in Indonesia, from year of 2002 up to 2011.
Table 1. ROA, ROE and stock price of PT Bank Central Asia Tbk. tahun 2002-2011 Year | Stock Price(Y) | ROA(X2) | ROE(X2) | 2002 | 2500 | 2.17 | 22.08 | 2003 | 3325 | 2.36 | 24.87 | 2004 | 2975 | 3.04 | 32.52 | 2005 | 3400 | 3.41 | 32.33 | 2006 | 5200 | 3.43 | 33.58 | 2007 | 7300 | 1.68 | 16.47 | 2008 | 5778 | 3.14 | 33.16 | 2009 | 5645 | 3.17 | 32.11 | 2010 | 4284 | 3.28 | 31.23 | 2011 | 3674 | 2.65 | 24.16 |

Using regression analysis we want to determine the relationship between ROA, ROE and stock price of PT BCA Tbk. In this case, ROA and ROE are the independent or explanatory variable (X), while stock price is the dependent variable that we want to explain (Y).

Regression Analysis

SUMMARY OUTPUT | | | Regression Statistics | Multiple R | 0.13028475 | R Square | 0.016974116 | Adjusted R Square | -0.263890422 | Standard Error | 1710.529517 | Observations | 10 |

ANOVA | | | | | | | df | SS | MS | F | Significance F | Regression | 2 | 353656.3 | 176828.15 | 0.060435241 | 0.941840446 | Residual | 7 | 20481378.6 | 2925911.229 | | | Total | 9 | 20835034.9 | | | |

| Coefficients | Standard Error | t Stat | P-value | Lower 95% | Upper 95% | Lower 95.0% | Upper 95.0% | Intercept | 5361.609293 | 2796.526605 | 1.917238793 | 0.096721961 | -1251.125335 | 11974.34392 | -1251.125335 | 11974.34392 | X Variable 1 | -142.3275587 | 3749.125063 | -0.037962873 | 0.970777259 | -9007.599603 | 8722.944486 | -9007.599603 |
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