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 71
- Downloads 0
The Effect of Menyama Braya Culture and Social Capital on Family Welfare
According to economic development theory, a country's economic development is determined by social and cultural factors. Gotong royong is a valuable ancestral heritage in Indonesian culture. The purpose of this study is...
Analysis of the Effect of Food Quality, Price, Location and Environment, and Service Quality on Customer Loyalty through Customer Satisfaction of Burger King Customers in Surabaya during the Pandemic
Community needs in the food industry have decreased due to the COVID-19 pandemic. . This can be seen from the economic growth in the second quarter of 2020 which decreased by minus 5.32 percent. Restaurant companies that...
Effect of Mudharabah Income, Musyarakah Income, and Murabahah Income on Net Profit in PT Bank BCA Indonesia
This study aims to obtain empirical evidence about the effect of mudharabah income, musyarakah income and murabahah income either partially or jointly on net profit at PT Bank BCA Syariah. The method used in this researc...
Success Deteriminan of the Manufacturing Industry Sector to Survive During the Pandemic in Indonesia
The island of Java is the area with the largest processing industry development in Indonesia. Supported by a large number of industries and the number of workers, industrialization in Java is growing. In the face of an i...
Enhancing Student Satisfaction through Service Quality and Perceived Value in Islamic Boarding Schools
This study aims to analyze the influence of service quality and perceived value on student satisfaction at Islamic boarding schools in Jombang Regency. Service quality includes three main dimensions, namely the quality o...