JMIF ANALYSIS OF ROE AND BOPO OF INDONESIA SHARIA BANK COMPANY ON FINANCIAL PERFORMANCE: USING EVIEWS 9

Abstract


This research is motivated by the merger between Bank Rakyat Indonesia Sharia (BRIS) company which change into Indonesia
Sharia Bank (BSI) company. Several factors influence it, one of which is the stock price. This share price is also influenced by financial ratios including ROE and BOPO. ROE and BOPO have reports that are very influential on BSI's share price because in sharia banking reports the second value has a significant value in the financial statements in the quarter when BRIS merged into BSI. This type of research was a quantitative descriptive research. The company was Indonesia Syaria Bank company. The data used in this research was secondary data in the form of time series data obtained from the financial reports of Indonesia Syaria Bank company. The analysis technique used multiple linear regression analysis with the help of the Eviews 9 program. The results show that simultaneously the ROE and BOPO financial ratios have a significant effect on stock prices. Partially, the financial ratio variable ROE has an effect but not significantly on stock prices. Meanwhile, the financial ratio variable BOPO partially has a negative and significant effect on stock prices.

INTRODUCTION
One of the institutions showing a strategic role in harmonizing, aligning and balancing various developments is banking. This is because the bank has the main function, namely as an institution that can collect and distribute public funds efficiently and effectively. In increasing a business, an industry certainly requires an injection of funds / capital. This capital can be obtained by deciding to make the company go public. By going public with the company, it means that investors are buying the company's prospects. many stock transactions are carried out on the IDX. Instead of the sacrifices made to get an optimal return on investment, many investors hope to get a bigger response. Therefore, to determine the level of return, dividends are factors that are used as consideration for investors to invest in the company. However, the company also expects the survival of the company.
For company management, the decision to distribute dividends is a factor that is difficult to consider, apart from the fact that growth and development as well as the viability of the company can be hampered, also because it affects the company's financial ratios. The bank as a company or issuer or economic entity also prepares financial reports to show data and information as well as financial position to be presented to parties who need or are interested. Investors are one of the users of financial statements. The main interest in the company's financial statements for investors is to find out how profitable a company is in relation to the investment they make in the company.
Investors prefer to invest in stocks, because stocks promise large levels of profit both financially and non-financially. However, besides promising a high level of profit, stock investment also has a high level of risk or high risk high return.
In stock investment activities, risk can be reduced by requiring accurate, actual and transparent information/data related to the company. In buying and selling shares, investors are influenced by micro or macro factors of the company. Micro factors are the company's internal factors that affect the buying and selling of shares including stock prices, level of risk, level of profit earned, and the company's own financial ratios. Meanhile, the macro factors are the company's external factors, namely the rupiah exchange rate, inflation rate, as well as the country's economic, social and political conditions. With this data and information, it is possible for investors to estimate the level of profit that will be obtained and also to choose shares from companies considered the most profitable.
There are 2 (two) types of analysis used to determine the true value of a stock, namely fundamental security analysis and technical analysis (Hartono, 2008). Fundamental analysis is an analysis seeking to estimate future stock prices by estimating the values of the fundamental aspects that affect stock prices in the future, and applying the relationships of these variables to obtain an estimated stock price (Husnan, 1998).
With fundamental analysis, investors are expected to know how the company's operations are profitable or not, whether the company is in a healthy condition or not, because the value or price of a stock is strongly influenced by the ratio of the company (Anoraga, 2000). Fundamental factors, according to Arifin, are factors directly related to the issuer/entity/company itself. The better the issuer's ratio, the greater the effect on rising stock prices, and vice versa (Arifin, 2002).
To find out whether the condition of an issuer/company is in a healthy condition or not, financial ratio analysis is used.
The company's financial statements are a source of fundamental data/information. Analysis of financial statements is intended to assess or calculate the ratio of an issuer/company. Financial rate is an analytical tool that can be used to analyze financial statements. The movement of stock prices is inseparable from the development of a company's financial ratios. In theory, if the ratio of a company increases, then the stock price will reflect the stock price, and vice versa (Ang, 1997).
The share price is the value of a share reflecting the wealth of the company and showing the shares. The rise and fall of stock prices is strongly influenced by the strength of supply and demand that occurs on the stock exchange. At any given time, stock prices also do not always reflect a company's ratio. However, it is more influenced by other factors outside of the company's ratio, for example, like news circulating in the community which assumes that investors are rational, so that the fundamental aspect is the main assessment/evaluation for investors, on the grounds that the value of shares represents the value of a company, not only the instantaneous intrinsic value, but also the expectation of the company's ability/ability to increase the value of wealth in the future that is more important. The following is the closing price of Indonesia Sharia Bank in 2021-2022. According to Tandelilin (2001) in Lestari & Sari, 2013) to analyze a company, apart from looking directly at the company's financial statements, you can also do financial ratio analysis.
From an investor's point of view, to assess the possibility of a company in the future, one of the most important indicators is to look at the growth of a company's profitability. The extent to which the investment that the investor make is able to provide returns that are suitable or in accordance with the level expected by the investor. If the ratio or profitability value of a company is high, then it will be of interest to investors, if the demand for shares increases, it will also result in the company's stock price increasing (Tandelilin (2001) in Lestari & Sari, 2013).
Tambunan (2007) argues that Return on Equity (ROE) or profitability of own capital is the ability of companies with their own capital to generate profits. The profit refers to profit available to shareholders (earnings for stakeholder equity) or profit after tax (earnings after tax) (Dewi & Wahyudi, 2012). High ROE reflects the company's ability to generate high returns for shareholders. The higher the company's ability to provide benefits to shareholders, the greater the desire of buyers for the shares. The higher the ROE the buyer wants, the higher the stock price.
The other factor that influences the stock price is Operational Costs to Operating Income (BOPO). According to (BOPO) Susilowati and Siregar, (2022) the BOPO ratio is used to measure the ability of bank management to control operational costs against operating income. The smaller this ratio means the more efficient the operational costs incurred by the bank, so that the bank is less likely to be in trouble. Banking profitability will develop if banking management is able to streamline the BOPO ratio, so that the return earned by shareholders will increase. Therefore, the size of the BOPO ratio will directly affect the company's profits and of course also affect the stock price of the company (Hartono, 2008). Based on the explanation of the problem and the previous research, it is interesting to study the impact that has arisen both before information regarding the merger of Islamic banking and after information has developed in the community, especially the capital market related to share prices at Indonesia Sharia Bank, so that further research is needed to clarify the information before and after the merger information.

Financial Ratios
Financial ratios are an assessment of the performance of a company which can be seen from the ability to generate profits which is an indicator of the company's ability to fulfill all its obligations and is an element for the company in creating value which shows the company's prospects in the future (Pahlevi & Anwar, 2022). Measurement of financial ratios can be done by improving operational activities that compete with other companies. According to Mulyadi, (2012) ratio measurement can be determined periodically which includes operational activities, organizational structure, employees based on targets, predetermined criteria, financial measurements can be carried out using financial ratios (Mulyadi, 2012). Munawir, (2012), explains that the purpose of assessing financial ratios is to determine the level of liquidity and determine the level of solvency. Financial Ratio Indicators are business growth, total operating income, total business, operating cash position.

Financial Ratios Analysis
Financial ratios are an analytical technique in the field of financial management that is used as a tool to measure the financial condition of a company in a certain period by comparing two variables taken from the company's financial statements, both from the balance sheet and income statement (Irawati, 2006). The following describes some examples of financial ratios used by companies: a. Return on Equity (ROE) Return on equity (ROE) is also known as return on equity. In some references it is also known as the ratio of total asset turnover or total asset turnover. This ratio examines the extent to which a company uses its own resources to be able to provide a return on equity (Fahmi, 2015).
To get ROE, you can use the following formula = × 100% b. Operating Costs to Operating Income (BOPO) BOPO is used to see how much a company's ability to manage its operational costs. The greater the operational costs, the worse the management of the company. The criteria for assessing operational efficiency based on BOPO are a healthy company that has BOPO <90%, meaning that if a company has BOPO more than these provisions, then the company is included in the category of unhealthy and inefficient (Harianto, 2017). The lower the BOPO ratio, the more efficient the ratio of a company/bank in carrying out its operations, and vice versa, the higher the BOPO ratio, the more inefficient a company/banking ratio is in carrying out its operations.
According to Rolianah et al., (2021) the following formula is to measure BOPO:

Assessment of Financial Ratios
For investors, information about a company's financial ratios can be used to see whether they will maintain their investment in the company or look for other alternatives. If the company's ratio is good, the business value will be high. With a high business value, investors will look at the company to invest their capital so that the share price will increase. In other words, stock price is a function of firm value. Meanwhile for companies, information on the company's financial ratios can be used for the following: a. To measure the achievements achieved by an organization in a certain period that reflects the level of success in implementing its activities.
b. To see the ratio of the organization as a whole as well as to assess the contribution of a part in achieving the company's goals as a whole.
c. To be used as a basis for determining the company's strategy for the future.
d. To provide guidance in making decisions and organizational activities in general and divisions or parts of the organization in particular.
e. To be used as a basis for determining investment policy in order to increase the efficiency and productivity of the company.

Share price
Definition of Share Price According to Widiadmojo, share price is the value of a person's participation or ownership in a company. The capital market has several types of share prices, one of which is the nominal price set by the issuer by assessing each share issued. This nominal price is stated in the share sheet. The initial price is the price before the price is listed on the stock exchange. The amount of this initial price depends on the agreement between the issuer and the underwriter. The market price is the selling price from one investor to another. The market price occurs after the shares are listed on the stock exchange. The opening price is the price that sellers demand from buyers during the opening hours of the exchange. The price demanded by sellers and buyers at the end of the opening day (Widiadmojo, 2000). Therefore, every investor or potential investor must comprehend the price or value of a share, which varies in size. a. Book Value is the value of shares according to the bookkeeping of the issuer company. The book value per share is the net assets owned by a shareholder with one share.
b. Market Value is the share price that occurs on the stock market at a time determined by the demand and supply of market participants' share prices.

Return on Equity (ROE) with Share Price
Profitability is a company's ability to earn profit, so that it has an influence on dividend policy. If the company has a high level of profitability, then it will also get high profits, and in the end the profits available to be distributed to shareholders will also be even greater. The greater the profit available to shareholders, the greater the dividend payments to shareholders or the allocation for retained earnings (Bangun & Hardiman, 2012).

Operating Costs to Operating Income (BOPO) to Share Prices
Banking profitability will develop if banking management is able to streamline operational costs against operating income (BOPO ratio), so that the return (return) obtained by shareholders will increase. Therefore, the size or value of the BOPO ratio will directly affect company profits and of course will also affect the company's share price (Hartono, 2008). The smaller the BOPO value or ratio, the more efficient the ratio of a bank is in controlling its operational costs. When operational costs are under control, the profits generated will be high, and of course the return for shareholders will also be high. So, theoretically, it can be seen that there is a negative influence between the BOPO ratio and stock prices. Because when the BOPO ratio is small/low, the stock price will increase, and vice versa (Rolianah et al., 2021).

Investment in Islamic Perspective
Islam emphasizes that investors act professionally in managing capital sources that have been facilitated by Allah SWT to him, so that he can use it on the right object and invest his capital for things that are allowed to invest. This is explained in QS. An-Nisa verse 29 through the word of Allah:  (2022) The centered VIF value is obtained for the ROE variable = 7.35 < 10 and for the BOPO variable = 7.35 < 10. The Centered VIF value of each of these independent variables is entirely less than (<) 10, which means it is free from multicollinearity problems .  (2022) Obtained value from Prob. The Chi-Square Breusch-Godfrey LM Test is 0.1413 which means more than α / alpha (0.1413 > 0.05). So it can be concluded that there is no autocorrelation problem, so that the classical assumption is fulfilled.

Partial Test (t Test)
The results of partial hypothesis testing using the Eviews 9 program are as follows: a) ROE (X1)  (2023) Based on the partial test results in Table 8 above, the probability value of Return on Equity (ROE) is 0.0769 > 0.05, then H0 is accepted and Ha is rejected, which means it is not significant.
In other words, t_statistic ROE = 2.133065 > t_table = 2.05183, then H0 is rejected and Ha is accepted, which means it has an effect. So it can be concluded that financial ratios (Return on Equity (ROE)) have a partial but not significant effect on stock prices at Indonesia Syaria Bank company. That means, if the ROE financial ratio increases, the stock price will also increase. And conversely if ROE decreases, the stock price will also decrease. However, this ROE financial ratio is not significant in influencing stock prices. a) BOPO (X2)

Return on Equity (ROE) (X1) Variable
Based on the results of the analysis tests presented in Table 8, the results of hypothesis testing show that the financial ratio ROE has an effect but not significant on stock prices, namely a probability value of 0.0769 > 0.05 and = 2,133065 > = 2,05183. The results of this study are in accordance with the theory mentioned earlier that the higher the ROE, the greater the profit generated by the company, meaning that the higher the ability of the company's capital to generate profits for shareholders.
In addition, a high ROE ratio will also be an attraction for other investors to invest in the company, so this will certainly increase share prices. However, in this study the ROE financial ratios are not too significant in influencing stock prices. This may be due to a decrease in ROE from the beginning of 2021 to the end of 2021, so that it has not been able to attract investors to invest in Indonesia Sharia Bank company. But entering 2022 Indonesia Sharia Bank company has been able to increase its ROE value from December 2021 of 13.71% to 16.58% in the 1st quarter of 2022.
The results of this study are also supported by the research of Noviyanti and Rusnaeni, small the value of ROE is as a material consideration for investments that investors will make.

Operating Costs to Operating Income (BOPO) (X2) Variable
Based on the results of the analysis tests that have been carried out as in the BOPO value or ratio, the more efficient the ratio of a bank is in controlling its operational costs. And when operational costs are under control, the profits generated will be high, and of course the return for shareholders will also be high. So theoretically it can be seen that there is a negative influence between the BOPO ratio and stock prices. Because when the BOPO ratio is small/low, the stock price will increase and vice versa.
The results of this study are also reinforced by Putri's research, (2016) Investors are one of the users of financial reports, in stock investment activities, risk can be reduced by requiring accurate, actual and transparent information/data related to the company. In analyzing a company, apart from looking directly at the company's financial statements, you can also do financial ratio analysis by calculating the value of Return on Equity (ROE) and Operational Costs to Operating Income (BOPO).

CONCLUSION
Based on the results of data analysis about the effect of financial ratios on stock prices at Indonesia Sharia Bank company, it can be concluded as follows.