COMPANY VALUE: THE ROLE OF CAPITAL STRUCTURE AND COMPANY PROFITABILITY GROWTH
Abstract
This study aims to examine and analyze the effect of capital structure, firm growth and profitability on firm value in manufacturing companies listed on the Indonesia Stock Exchange (IDX) for the 2017 - 2019 period. This study uses an associative approach. Data collection techniques in this study using documentation techniques. The data analysis technique in this research is using descriptive statistical analysis, multiple linear regression analysis, classical assumption test, hypothesis testing, and the coefficient of determination with a significance level of 5%. The results of this study indicate that the capital structure as measured by the Debt to Equity Ratio (DER) has a negative and significant effect on firm value as measured by Price Book Value (PBV). Company growth has a positive and insignificant effect on firm value (PBV). Profitability as measured by using Return On Equity (ROE) has a positive and insignificant effect on Company Value (PBV) and capital structure, company growth and profitability together have a significant effect on company value in manufacturing companies listed on the Indonesia Stock Exchange for the period 2017 -2019.
References
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Alpi, MF (2018). The Effect of Debt To Equity Ratio, Inventory Turn Over, and Current Ratio on Return On Equity in Pharmaceutical Sector Companies Listed on the Indonesia Stock Exchange. Proceedings: The National Conferences Management and Business (NCMAB) 2018 “Empowerment and Strengthening Business Competitiveness in the Digital Age”, 1(1), 158-175
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Brigham, EF (2012). Intermediate finance management (5th ed.). Harbor Drive: The Dryden Press.
Hill, RB (2012). Effect of Capital Structure on Firm Value through Profitability: Panel Data Analysis of Manufacturing Companies on the Indonesia Stock Exchange. Journal of Finance and Business, 4(3), 12-25.
Dewi, USA (2013). Effect of Capital Structure, Profitability and Firm Size on Firm Value. Yudayana University Accounting E-Journal, 4(2), 358-372.
Fahmi, I. (2014). Financial Statement Analysis. Bandung: Alphabeta.
Fau, NR (2015). Effect of Capital Structure, Company Growth, Company Size and Profitability on the Value of Manufacturing Companies Listed on the IDX. Journal of Economics and Business, 4(1), 103-115.
Gitman, LJ (2003). Principles of Managerial Finance, International Edition, 10th Edition. Boston: Pearson Education.
Gultom, R. (2013). Analysis of Factors Affecting Firm Value in Pharmaceutical Companies on the Indonesia Stock Exchange. Journal of Microskilled Economics Wira, 3(1), 51-60.
Gunawan, E. (2012). Theoretical Review of Environmental Costs on Product Quality and Its Consequences on the Company's Competitive Advantage. Scientific Journal of Accounting Students, 1(2), 47-50.
Halim, A. (2015). Business Financial Management: Concepts and Applications, First Edition. Jakarta: Media Discourse Partners.
Hanafi, M. (2012). Financial Statement Analysis. Yogyakarta : (UPP) STIM YKPN.
Harmoni. (2011). Financial Management Based on Balanced Scorecard Approach Theory, Cases, and Business Research. Jakarta: Earth Literacy.
Hemastuti, CP (2014). The Influence of Profitability, Dividend Policy, Debt Policy, Investment Decision, and Insider Ownership on Firm Value. Journal of Accounting Science & Research, 3(4), 110-120.
Hermuningsih, S. (2013). The Effect of Profitability, Growth Opportunity, Capital Structure on Firm Value in Public Companies in Indonesia. Bulletin of Monetary, Economics and Banking, 16(2),127-148
January. (2013). Analysis of Accounts Receivable Turnover and Inventory Turnover in Increasing Profitability of PT.Socfin Indonesia. Economist, 13(1), 126-144.
Jensen, MC (2001). Value Maximization, Stakeholder Theory, And The Corporate Objective Function. Journal of Applied Corporate Finance, Morgan Stanley, 14(3), 8-21.
Jufrizen, J. (2019). The Effect of Debt Ratio, Long Term Debt to Equity Ratio and Institutional Ownership on Return on Assets in Food and Beverage Sub-Sector Companies Listed on the Indonesia Stock Exchange. Journal of Motivation Management, 15(1), 7-18.
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Kuncoro, M. (2011). Quantitative Method. Yogyakarta: YKPN.
Lestari, HS(2017) Factors Affecting Bank Profitability in Conventional Banks Listed on the Indonesia Stock Exchange.Journal of Management and Marketing Services, 10(2), 267-280.
Machfoedz, M. (2006). Corporate Governance Mechanisms, Earnings Quality and Company Value. National Accounting Symposium IX, 9(1), 1-23.
Mardiyanto, H. (2009). Abstract Financial Management: Theory. Jakarta: Grasindo.
Meidiawati, K. (2016). Effect of Size, Growth, Profitability, Capital Structure, Dividend Policy on Firm Value. Journal of Accounting Science and Research, 5(2), 1-16.
Myers, N. (2001). Corporate Financing and Investment Decision When Firms Have Information That Investors do Not Have. NBER Working Paper, 1(3), 96-115.
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Nurminda, A. (2017). The Influence of Profitability, Leverage, and Firm Size on Firm Value (Study on Manufacturing Companies in the Goods and Consumption Sub-Sector Listed on the Indonesia Stock Exchange for the Period 2012-2015). e-Proceedings of Management, 4(1), 48-62.
Pradana, HR (2013). Effect of Business Risk, Asset Structure, Size and Sales Growth on Capital Structure. Accounting Analysis Journal, 2(4), 423-429.
Rialdy, N. (2018). The Effect of Capital Structure, Investment Decisions and Dividend Policy on Firm Value in State-Owned Enterprises Listed on the IDX for the Period 2013 – 2017. Liabilities Journal of Accounting Education, 1(3), 272-288.
Saragih, F. 2018. Analysis of Profitability Ratios in Assessing Company Financial Performance at PT. Port of Indonesia I (Persero) Medan. Journal of Economists, Faculty of Economics and Business, 1(1), 57-68.
Sari, PI (2014). The Effect of Company Growth and Leverage on Profitability and Firm Value. E-Journal of Management, 3(5), 1427-1441.
Sawir, A. (2015). Financial Performance Analysis and Corporate Financial Planning. Jakarta: Gramedia Pustaka Utama.
Soliha, E. (2002). The Influence of Debt Policy on Company Value And Several Factors That Influence It. Journal of Business and Economics, 9(2), 149-163.
Sudana, IM (2011). Corporate Financial Management Theory and Practice. Jakarta: Erlangga.
Sugiyono. (2016). Quantitative, Qualitative and R&D Research Methods. Bandung: Alphabet.
Suharli, M. (2006). Empirical Study on the Effect of Profitability, Leverage, and Stock Price on the Total Cash Dividend, Study on Companies Listed on the Jakarta Stock Exchange Period 2002-2003. Maksi Journal of Atma Jaya Catholic University of Indonesia, 6(2), 10-25.
Suprantiningrum. (2013). The Influence of Accounting Students' Emotional Intelligence Dimensions on Accounting Understanding Levels. Journal of Accounting, 27(1), 101-108.
Susanto, A. (1997). Corporate Culture: Management and Business Competition Series. Jakarta: Elex Media Komputindo.
Tandelilin, E. (2001). Investment Analysis and Portfolio Management. Yogyakarta: BPFE.
Tika, MP (2012). Organizational Culture and Company Performance Improvement. Jakarta: Earth Literacy.
Wihardjo, DS (2014). Analysis of Factors Affecting Firm Value (Study on Manufacturing Companies Listed on the Stock Exchange in 2009-2011). Journal of Diponorogo University, 5(2), 36-56.
Zuliani, S. (2014). Effect of Profitability, Sales Growth, Asset Structure and Growth Rate on Capital Structure. Journal of Accounting Science and Research, 3(7), 112-120.
Alpi, MF (2018). The Effect of Debt To Equity Ratio, Inventory Turn Over, and Current Ratio on Return On Equity in Pharmaceutical Sector Companies Listed on the Indonesia Stock Exchange. Proceedings: The National Conferences Management and Business (NCMAB) 2018 “Empowerment and Strengthening Business Competitiveness in the Digital Age”, 1(1), 158-175
Ambarwati, SD (2010). Advanced Financial Management. Yogyakarta: Graha Ilmu.
Atmadja, A. (2014). The Effect of Auditor Professional Skepticism, Independence, and Auditor Experience on Auditor Responsibilities in Detecting Fraud and Errors in Financial Statements. e-Journal of S1 AK Ganesha University of Education, 2(1), 1-11.
Brealey. (2007). Fundamentals of Financial Management. Jakarta: Erlangga.
Brigham, EF (2012). Intermediate finance management (5th ed.). Harbor Drive: The Dryden Press.
Hill, RB (2012). Effect of Capital Structure on Firm Value through Profitability: Panel Data Analysis of Manufacturing Companies on the Indonesia Stock Exchange. Journal of Finance and Business, 4(3), 12-25.
Dewi, USA (2013). Effect of Capital Structure, Profitability and Firm Size on Firm Value. Yudayana University Accounting E-Journal, 4(2), 358-372.
Fahmi, I. (2014). Financial Statement Analysis. Bandung: Alphabeta.
Fau, NR (2015). Effect of Capital Structure, Company Growth, Company Size and Profitability on the Value of Manufacturing Companies Listed on the IDX. Journal of Economics and Business, 4(1), 103-115.
Gitman, LJ (2003). Principles of Managerial Finance, International Edition, 10th Edition. Boston: Pearson Education.
Gultom, R. (2013). Analysis of Factors Affecting Firm Value in Pharmaceutical Companies on the Indonesia Stock Exchange. Journal of Microskilled Economics Wira, 3(1), 51-60.
Gunawan, E. (2012). Theoretical Review of Environmental Costs on Product Quality and Its Consequences on the Company's Competitive Advantage. Scientific Journal of Accounting Students, 1(2), 47-50.
Halim, A. (2015). Business Financial Management: Concepts and Applications, First Edition. Jakarta: Media Discourse Partners.
Hanafi, M. (2012). Financial Statement Analysis. Yogyakarta : (UPP) STIM YKPN.
Harmoni. (2011). Financial Management Based on Balanced Scorecard Approach Theory, Cases, and Business Research. Jakarta: Earth Literacy.
Hemastuti, CP (2014). The Influence of Profitability, Dividend Policy, Debt Policy, Investment Decision, and Insider Ownership on Firm Value. Journal of Accounting Science & Research, 3(4), 110-120.
Hermuningsih, S. (2013). The Effect of Profitability, Growth Opportunity, Capital Structure on Firm Value in Public Companies in Indonesia. Bulletin of Monetary, Economics and Banking, 16(2),127-148
January. (2013). Analysis of Accounts Receivable Turnover and Inventory Turnover in Increasing Profitability of PT.Socfin Indonesia. Economist, 13(1), 126-144.
Jensen, MC (2001). Value Maximization, Stakeholder Theory, And The Corporate Objective Function. Journal of Applied Corporate Finance, Morgan Stanley, 14(3), 8-21.
Jufrizen, J. (2019). The Effect of Debt Ratio, Long Term Debt to Equity Ratio and Institutional Ownership on Return on Assets in Food and Beverage Sub-Sector Companies Listed on the Indonesia Stock Exchange. Journal of Motivation Management, 15(1), 7-18.
cashmere. (2012). Financial Statement Analysis. Jakarta: Raja Grafindo Persada.
Kuncoro, M. (2011). Quantitative Method. Yogyakarta: YKPN.
Lestari, HS(2017) Factors Affecting Bank Profitability in Conventional Banks Listed on the Indonesia Stock Exchange.Journal of Management and Marketing Services, 10(2), 267-280.
Machfoedz, M. (2006). Corporate Governance Mechanisms, Earnings Quality and Company Value. National Accounting Symposium IX, 9(1), 1-23.
Mardiyanto, H. (2009). Abstract Financial Management: Theory. Jakarta: Grasindo.
Meidiawati, K. (2016). Effect of Size, Growth, Profitability, Capital Structure, Dividend Policy on Firm Value. Journal of Accounting Science and Research, 5(2), 1-16.
Myers, N. (2001). Corporate Financing and Investment Decision When Firms Have Information That Investors do Not Have. NBER Working Paper, 1(3), 96-115.
Nugrahani. (2012). The Influence of Company Size, Liquidity, Profitability, and Business Risk on Capital Structure in Pharmaceutical Companies. Journal of Management Unud, 4(7), 59-72.
Nurminda, A. (2017). The Influence of Profitability, Leverage, and Firm Size on Firm Value (Study on Manufacturing Companies in the Goods and Consumption Sub-Sector Listed on the Indonesia Stock Exchange for the Period 2012-2015). e-Proceedings of Management, 4(1), 48-62.
Pradana, HR (2013). Effect of Business Risk, Asset Structure, Size and Sales Growth on Capital Structure. Accounting Analysis Journal, 2(4), 423-429.
Rialdy, N. (2018). The Effect of Capital Structure, Investment Decisions and Dividend Policy on Firm Value in State-Owned Enterprises Listed on the IDX for the Period 2013 – 2017. Liabilities Journal of Accounting Education, 1(3), 272-288.
Saragih, F. 2018. Analysis of Profitability Ratios in Assessing Company Financial Performance at PT. Port of Indonesia I (Persero) Medan. Journal of Economists, Faculty of Economics and Business, 1(1), 57-68.
Sari, PI (2014). The Effect of Company Growth and Leverage on Profitability and Firm Value. E-Journal of Management, 3(5), 1427-1441.
Sawir, A. (2015). Financial Performance Analysis and Corporate Financial Planning. Jakarta: Gramedia Pustaka Utama.
Soliha, E. (2002). The Influence of Debt Policy on Company Value And Several Factors That Influence It. Journal of Business and Economics, 9(2), 149-163.
Sudana, IM (2011). Corporate Financial Management Theory and Practice. Jakarta: Erlangga.
Sugiyono. (2016). Quantitative, Qualitative and R&D Research Methods. Bandung: Alphabet.
Suharli, M. (2006). Empirical Study on the Effect of Profitability, Leverage, and Stock Price on the Total Cash Dividend, Study on Companies Listed on the Jakarta Stock Exchange Period 2002-2003. Maksi Journal of Atma Jaya Catholic University of Indonesia, 6(2), 10-25.
Suprantiningrum. (2013). The Influence of Accounting Students' Emotional Intelligence Dimensions on Accounting Understanding Levels. Journal of Accounting, 27(1), 101-108.
Susanto, A. (1997). Corporate Culture: Management and Business Competition Series. Jakarta: Elex Media Komputindo.
Tandelilin, E. (2001). Investment Analysis and Portfolio Management. Yogyakarta: BPFE.
Tika, MP (2012). Organizational Culture and Company Performance Improvement. Jakarta: Earth Literacy.
Wihardjo, DS (2014). Analysis of Factors Affecting Firm Value (Study on Manufacturing Companies Listed on the Stock Exchange in 2009-2011). Journal of Diponorogo University, 5(2), 36-56.
Zuliani, S. (2014). Effect of Profitability, Sales Growth, Asset Structure and Growth Rate on Capital Structure. Journal of Accounting Science and Research, 3(7), 112-120.
Published
2021-08-15
How to Cite
ALPI, M. Firza.
COMPANY VALUE: THE ROLE OF CAPITAL STRUCTURE AND COMPANY PROFITABILITY GROWTH.
International Proceeding of Law and Economic, [S.l.], p. 112-117, aug. 2021.
Available at: <https://jurnal.pancabudi.ac.id/index.php/iple/article/view/3913>. Date accessed: 21 dec. 2024.
Section
Articles
