ABSTRACT
This research aimed to describe the analysis effect of financial performance on Cumulative Abnormal Returns of companies listed in Indonesia Stock Exchange for the 2014-2018 period using the event study method. The results of this research indicate that there is a significant difference in Return on Equity (ROE) while Tobin’s Q Ratio and Cumulative Abnormal Returns have no significant differences before and after merger and acquisitions. Moreover, Return on Equity (ROE) and Tobin’s Q Ratio do not have a statistically significant effect on Cumulative Abnormal Returns before and after merger and acquisitions. Since Return on Equity (ROE) has a significant difference before and after merger and acquisitions, it can be meant that merger and acquisitions have the implications to the synergy and value-added to the companies before and after can be shown by the profit margin and shareholders’ equity of the companies as the components of Return on Equity (ROE).
