Electronic Theses and Dissertation

This study examines the usefulness of financial ratios to predicting earning changes ores year ahead` the future earrings are can be identified with trend analysis- least square method, so that be found the bias of earning between realized and expected earrings. the objective of the study was to testing the relationship of the financial ratios in dealing with the bias rate of realized earnings versus expected earnings of linear trend- least square method the financial ratios are: gross profit margin ( x), operating profit margin ( x2) , return on assets (roa) ( x.) total assets turn over ( x 4), sales to fixed assets ( x s), return on equity (roe) ( x6), inventory turn over (x,), account payable turn over (x8), and debt ratio (x9). the rate of earnings bias are: the bias rate of realized earnings versus expected earrings of linear trend- least square method (y,) ,the favorable bias rate of realized earnings versus expected earnings of linear trend- east square method (y) and the favorable bias rate of realized earrings versus expected earnings of linear trend-least square method (y.) . the earnings in this study is earnings before tax (ebt). the subjects of this study are manufacturing forms that are listed in indonesian stock exchange qdx) 2002-2007 . by using purposive sampling method. researcher has been found 24 forms for sample, 6 firms of them have been eliminated from sample list. hypotheses were tested by using spss program version 15.0 with two two methods: enter method and stepwise method. the result of this study by using enter method, financial ratios have been lower effected and significant to the bias rate of realized earnings versus expected earrings of linear trend- least square method and strength effected significant to the favorable bias rate of realized earnings versus expected earnings of linear trend- least square method, but not significant to the favorable bias rate of realized earrir.gs versus expected earnings of linear trend- least square method. continuously, by using stepwise regression method, return on assets (roa) and return on equity (roe) have been effected significant to the bias rate of realized earnings versus expected earnings of linear trend- least square method, return on assets (roa) have been effected significant to the favorable bias rate of realized earnings versus expected earnings of linear trend-least square method, and sales to fixed assets have been effected significant to the favorable bias rate of realized earnings versus expected earnings of linear trend-least square method. keyword : future earning, bias rate, financial ratio, profitability, trend analysis, favorable, unfavorable, realized earnings and expected earnings.