THE RELATIONSHIP BETWEEN PROFITABILITY RATIOS AND STOCK RETURNS OF THE LISTED COMPANIES IN STOCK EXCHANGE OF THAILAND: TECHNOLOGYGROUP

Abstract

This article have a purpose to study the relationship between Profitability Ratio and Stock Return of the Listed Companies in Stock Exchange of Thailand: Technology Group. The independent variables were Profitability Ratio consisting of 1. Return on equity, 2. Return on total assets, 3. Net Profit Margin, and 4. Gross Profit Margin and Dependent variables is Stock Return. The researcher used descriptive statistics research methodology and inferential statistics. Used the secondary data from the financial statements totaling 114 samples in 2017 - 2019. Statistics used in data analysis were finding the maximum, the minimum, mean value, the standard deviation and hypothesis testing. Multiple Regression Analysis shows Return on Equity,Return on Total Assets and Net Profit Margin are related to Stock Return of Listed Companies because Sig lower than 0.05. The results of the study show that 1. Return on Equity and the Rate of Return on Total Assets correlates in the same direction with the Stock Return, Coefficients - B of ROE is0.439, Coefficients - B of ROA is0.431and 2. Net Profit Margin relationship in the opposite direction with the Stock Return of Listed Companies in the Stock Exchange of Thailand: Technology industry group. Coefficients - B of NPM is - 0.480. The results of this study suggest that investors should focus on the rate of return on equity, return on total assets and net profit margin affects to the stock return for investors to have sustainable returns.