The Influence and Contribution of Financial Performance to Firm Value: A Study on Manufacturing Companies Listed on the Indonesia Stock Exchange
DOI:
https://doi.org/10.38035/jafm.v4i6.282Keywords:
Price to Book Value, Return on Assets, Total Assets Turnover, Debt to Assets Ratio, Dividend Payout RatioAbstract
This research, titled “The Influence and Contribution of Financial Performance to Firm Value: A Study on Manufacturing Companies in the Indonesia Stock Exchange,” aims to assess the impact and contribution of financial performance on firm value. Financial performance is measured using Return on Assets, debt-to-assets ratio, Total Assets Turnover, and Dividend Payout Ratio, while firm value is proxied using price-to-book value. The sample is determined through purposive sampling, and multiple linear regression analysis is employed to examine the influence of financial performance variables on firm value. The research findings indicate that Return on Assets and Debt to Assets Ratio have a significant favorable influence. Meanwhile, Total Assets Turnover has a non-significant negative impact, and the Dividend Payout Ratio has a positive but non-significant effect on firm value. Approximately 6.9% of the variability in firm value can be explained by financial performance variables. Implications: The findings of this research provide insights for investors in making investment decisions and underscore the importance of understanding financial performance and its impact on firm value
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Zutter, C. J., & Smart, S. B. (2022). Principles of Managerial Finance (sixteenth). Pearson Education Limited.
Brealey, R. A., Myers, S. C., & Allen, F. (2017). Principles of Corporate Finance (Twelfth). McGraw-Hill Education. http://marefateadyan.nashriyat.ir/node/150
Brigham, E. F., & Daves, P. R. (2019). Intermediate Financial Management (13th ed). Cengage Learning, Inc.
Brigham, E. F., & Ehrhardt, M. C. (2020). Financial Management: Theory and Practice (16th ed). Cengage Learning, Inc.
Brigham, E. F., & Houston, J. F. (2019). Fundamentals of Financial Management. (Fifteenth). Cengage Learning, Inc.
Bustani, B., Kurniaty, K., & Widyanti, R. (2021). The Effect of Earning Per Share, Price to Book Value, Dividend Payout Ratio, and Net Profit Margin on the Stock Price in Indonesia Stock Exchange. Jurnal Maksipreneur: Manajemen, Koperasi, Dan Entrepreneurship, 11(1), 1. https://doi.org/10.30588/jmp.v11i1.810
Dang, T. D., & Do, T. V. T. (2021). Does capital structure affect firm value in Vietnam? Investment Management and Financial Innovations, 18(1), 33–41. https://doi.org/10.21511/imfi.18(1).2021.03
Daniswara, D. A., Widjanarko, H., & Hikmah, K. (2022). The Accuracy Test of Technical Analysis of Moving Average, Bollinger Bands, and Relative Strength Index on Stock Prices of Companies Listed in Index Lq45. Indikator: Jurnal Ilmiah Manajemen Dan Bisnis, 6(2), 16. https://doi.org/10.22441/indikator.v6i2.14806
Daoud, J. I. (2018). Multicollinearity and Regression Analysis. Journal of Physics: Conference Series, 949(1). https://doi.org/10.1088/1742-6596/949/1/012009
De Luca, P. (2018). Analytical Corporate Valuation Fundamental Analysis, Asset Pricing, and Company Valuation. In Springer Nature Switzerland AG. Springer Nature. https://doi.org/https://doi.org/10.1007/978-3-319-93551-5
Easton, P. D., McAnally, M. L., & Sommers, G. A. (2021). Financial Statement Analysis & Valuation (Sixth). Cambridge Business Publishers, LLC.
Edwards, R. D., Magee, J., & Bassetti, W. C. (2018). Technical analysis of stock trends. CRC press.
Ferriswara, D., Sayidah, N., & Agus Buniarto, E. (2022). Do corporate governance and capital structure predict financial performance and firm value? (empirical study of Jakarta Islamic index). Cogent Business and Management, 9(1). https://doi.org/10.1080/23311975.2022.2147123
Fridson, M. S., & Alvarez, F. (2020). Financial Statement Analysis, A Pratitioner’s Guide (Fifth). John Wiley & Sons, Inc.
Ghozali, I. (2018). Aplikasi Analisis Multivariate Dengan Program IBM SPSS 25 (9th ed.). Badan Penerbit Universitas Diponegoro.
Gitman, L. J., & Zutter, C. J. (2017). Principles of Managerial Finance (Fourteenth). Pearson Education Limited. www.pearsonmylab.com
Hasanudin, & Wijareni, N. (2023). The Effect of Capital Structure, Liquidity, and Firm Size on Company Value with Profitability as an Intervening Variable. JMKSP (Jurnal Manajemen, Kepemimpinan, Dan Supervisi Pendidikan), 8(1), 461–473. https://doi.org/10.31851/jmksp.v8i1.12627
Horne, J. C. Van, & John, M. W. J. (2009). Fundamentals of Financial Management (thirteenth). Pearson Education Limited.
Husna, A., & Satria, I. (2019). Effects of Return on Asset, Debt To Asset Ratio, Current Ratio, Firm Size, and Dividend Payout Ratio on Firm Value. International Journal of Economics and Financial Issues, 9(5), 50–54. https://doi.org/10.32479/ijefi.8595
Kusumawati, V. C., Robiyanto, R., & Harijono, H. (2021). Profitability and Dividend Policy Affects Firm Value in The Infrastructure, Utility and Transportation Sector. International Journal of Social Science and Business, 5(1), 8–15. https://doi.org/10.23887/ijssb.v5i1.29822
Luo, Y., & Jiang, C. (2022). The Impact of Corporate Capital Structure on Financial Performance Based on Convolutional Neural Network. Computational Intelligence and Neuroscience, 2022. https://doi.org/10.1155/2022/5895560
Markonah, M., Salim, A., & Franciska, J. (2020). Effect of Profitability, Leverage, and Liquidity To the Firm Value. Dinasti International Journal of Economics, Finance & Accounting, 1(1), 83–94. https://doi.org/10.38035/dijefa.v1i1.225
Novita, R. D., Djazuli, A., & Choiriyah, C. (2022). Effect of Profitability, Company Size, and Capital Structure on Stock Prices in the Consumer Goods Industry Sector Listed on the Indonesia Stock Exchange. International Journal of Finance Research, 3(2), 101–112. https://doi.org/10.47747/ijfr.v3i2.783
Nurlaela, S., Mursito, B., Kustiyah, E., Istiqomah, I., & Hartono, S. (2019). Asset Turnover, Capital Structure and Financial Performance Consumption Industry Company in Indonesia Stock Exchange. International Journal of Economics and Financial Issues, 9(3), 297–301. https://doi.org/10.32479/ijefi.8185
Ogbulu, O. M., & Emeni, F. K. (2012). Capital Structure and Firm Value: Empirical Evidence from Nigeria. International Journal of Business and Social Science, 3(19), 252–261.
Paolella, M. S. (2018). Linear models and time-series analysis: regression, ANOVA, ARMA, and GARCH. John Wiley & Sons.
Petrusheva, N., & Jordanoski, I. (2016). Comparative analysis between the fundamental and technical analysis of stocks. Journal of Process Management. New Technologies, 4(2), 26–31. https://doi.org/10.5937/jpmnt1602026p
Rehman, O. U. (2016). Impact of Capital Structure and Dividend Policy on Firm Value. Journal of Poverty, Investment and Development, 21(0), 40–57. https://iiste.org/Journals/index.php/JPID/article/view/28887
Ross, S. A., Westerfield, R. W., Jordan, B. D., Roberts, G. S., Pandes, J. A., & Holloway, T. A. (2019). Fundamentals of Corporate Finance (Tenth). McGraw-Hill.
Smart, S. B., & Zutter, C. J. (2020). Fundamentals of investing. Pearson.
Stephen, M., Gregory, N., & Maurice, S. (2015). Effect Of Dividend On Share Price Volatility In Frontier Exchanges?: Kenya’s Perspective. Research Journal Of Finance and Accounting, 6(14), 110–121.
Sugiyono. (2017). Metode Penelitian Bisnis: Pendekatan Kuantitatif, Kualitatif, Kombinasi dan R&D. Alfabeta.
Yang, F., & Gu, S. (2021). Industry 4.0 is a revolution that requires technology and national strategies. Complex and Intelligent Systems, 7(3), 1311–1325. https://doi.org/10.1007/s40747-020-00267-9
Zutter, C. J., & Smart, S. B. (2022). Principles of Managerial Finance (sixteenth). Pearson Education Limited.
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Published
2024-01-01
How to Cite
I Ketut Mangku, Andika, A., Della Nanda Luthfiana, & Agustina Gabyanti Kleden. (2024). The Influence and Contribution of Financial Performance to Firm Value: A Study on Manufacturing Companies Listed on the Indonesia Stock Exchange. Journal of Accounting and Finance Management, 4(6), 400–411. https://doi.org/10.38035/jafm.v4i6.282
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