The Influence of Debt to Equity Ratio and Current Ratio to Return on Equity and Price to Book Value: Subsector Food and Baverages Industry of Company Listedat Indonesian Stock Exchange Period 2014-2019
Journal Title: Journal of Economics, Finance and Management Studies - Year 2022, Vol 5, Issue 03
Abstract
Market confidence in a company is determined by the size of the company's value. This trust is not only in the current financial performance but includes the company's prospects in the future. Reilly & Brown (2011) said that among the methods that can be used to determine firm value is by comparing stock prices to relevant variables that affect the stock value such as price to book value (PBV). The price to book value (PBV) is the comparison between the market price per share and the book value per share or the comparison between the market value (market price) and its book value (original value). Based on previous research, there are several factors that can affect firm value, including: funding decisions, dividend policy, investment decisions, CSR, company growth, and company size. Some of these factors have an inconsistent relationship and influence on firm value. This study aims to determine the effect of DER and CR on ROE and PBV in the Food and Beverages industry sub-sector companies listed on the Indonesia Stock Exchange for the period 2014-2019. The company that became the population in this study were 32 with a sample of 12 companies determined by purposive sampling method. Research data processing and hypothesis testing using path analysis techniques with SPSS version 22 application tools. The results of this study indicate that, simultaneously or partially DER and CR have a positive and significant effect on ROE, DER and CR simultaneously have a negative and significant effect on PBV, but partially DER and CR have a negative and insignificant effect on PBV. ROE has a positive and significant effect on PBV, and ROE is proven to be an intervening variable or a mediating variable for the effect of DER and CR on PBV.
Authors and Affiliations
Zaini, Eddy Sanusi Silitonga, Guswandi
Keywords
Related Articles
- EP ID EP706940
- DOI 10.47191/jefms/v5-i3-09
- Views 45
- Downloads 0
The Impact of Video Marketing on Social Media Platforms on the Millennial's Purchasing Intention toward Electric Vehicles
Thailand’s market for electronic vehicles has experienced a tremendous growth especially with the rising number of environmentally conscious consumers, as well as the innovation-driven automobile industry of Thailand. On...
Misinvoicing in Benin's International Trade: An Analysis from Mirror Statistics
The aim of this work is twofold : to measure the level of misinvoicing in Benin's trade with its main trading partners and to determine its causes. First, based on mirror statistics, we estimate the gross trade discrepan...
The Influence of Strategic Planning and Economic Resource Base View on Sustainable Development Mediated by Government Policy at the Ministry of Maritime Affairs and Fisheries
The purpose of this study is to examine the direct effect of Strategic Planning and Economic Resource Base View on Sustainable Development and the direct effect of Government Policy on Sustainable Development and the ind...
The Influence of Inflation, Exchange Rate and Foreign Exchange Reserves on Indonesian Government Bond Yield with the Bank Indonesia Rate as Moderation
The purpose of this study was to analyze and examine the effect of inflation, exchange rates, foreign exchange reserves on the yield to maturity (YTM) of fixed rate series bonds denominated in rupiah with a tenor of 10 y...
Effect of Women's Entrepreneurship Practices on Information Communication Technology (ICT) Adoption During the Covid-19 Pandemic: A Case Study in West Sumatra, Indonesia
Today, the increasing number of women entrepreneurs adopting ICTs has grown their businesses and made them more efficient. This study empirically analysed the practice of women's entrepreneurship and its relation to the...