The Influence of Profitability and Price Earning Ratio on Company Value through Capital Structure in the Banking Industry Sector on the Idx
Journal Title: Journal of Economics, Finance and Management Studies - Year 2022, Vol 5, Issue 10
Abstract
The purpose of this study was to examine and analyze the effect of profitability and price earning ratio on company value through capital structure in the banking industry sector on the IDX. This research is explanatory through hypothesis testing to test the causal relationship between the variables of profitability, price earning ratio, company value and capital structure. The data used in this research is secondary data from annual report data and financial report data of banking companies. The sampling method used purposive sampling. Hypothesis testing in this study uses path analysis. The results showed that profitability did not support the increase in the capital structure of the banking industry sector on the Indonesia Stock Exchange, and the price earning ratio did not support the capital structure of the banking industry sector on the Indonesia Stock Exchange. Then, profitability supports an increase in the value of the banking industry sector company on the Indonesia Stock Exchange and the price earning ratio does not support an increase in the value of the banking industry sector company on the Indonesia Stock Exchange, the capital structure does not support an increase in the value of the banking industry sector company on the Indonesia Stock Exchange, and there is no support mediation between profitability and price earning ratio to company value through capital structure, so that capital structure cannot be an intermediary from profitability and price earning ratio to company value.
Authors and Affiliations
Leonardo Sihombing, Ismail Razak, Harry Indratjahyo
Keywords
Related Articles
- EP ID EP726483
- DOI 10.47191/jefms/v5-i10-25
- Views 39
- Downloads 0
Business Environment and Economic Growth: Further Empirical Results
This paper examines the impact of the business environment on economic growth using several samples of both developed and developing countries. Based on data from the World Bank for the 2000- 2015 period for a sample o...
Globalisation and Insurance Sector Penetration: Macro Evidence from Nigeria
The impact of globalisation on the penetration of the insurance industry in Nigeria from 1987 to 2021 was investigated in this study using the distributed lag long-run estimating technique. The results from the use of KO...
Energy Price Fluctuation and Inflation in Nigeria: A Granger Causality Analysis
The Nigerian economy depends to a reasonable extent on the sale of crude oil for its expenditure. The country also depends on importation for a high level of its consumption. Given these events, this paper set out to inv...
Assessment of Macroeconomic Factors, Yield to Maturity and Time to Maturity towards Fair Price of Corporate Sukuk in Indonesia and Malaysia
This study aims to examine the effect of macroeconomic factors (SBIS Yield Rate, Islamic Interbank Rate, Rupiah and Ringgit Exchange Rates against Dollar), Partial Yield to Maturity, and Time to Maturity and the effect...
The Role of Finance Literacy Moderation on the Influence of Lifestyle and Financial Technology on the Consumption Behavior of the Millennial Generation in the City of Denpasar, Bali-Indonesia
The millennial generation is currently facing various challenges including limited financial resources and the rising cost of living. Therefore, knowledge in personal financial management is needed to help them make the...