Browse > Article
http://dx.doi.org/10.13106/jafeb.2021.vol8.no6.0839

Determinants of Firm Value: A Case Study of the Food and Beverage Sector of Indonesia  

BAHRAINI, Syintia (Sekolah Tinggi Ilmu Ekonomi Insan Pembangunan)
ENDRI, Endri (Faculty of Economics and Business, Universitas Mercu Buana)
SANTOSO, Sugeng (Faculty of Economics and Business, Universitas Mercu Buana)
HARTATI, Leni (Faculty of Business Economics and Social Sciences, Universitas Tangerang Raya)
PRAMUDENA, Sri Marti (Faculty of Economics and Business, Universitas Mercu Buana)
Publication Information
The Journal of Asian Finance, Economics and Business / v.8, no.6, 2021 , pp. 839-847 More about this Journal
Abstract
There are many factors that affect the firm value, both internal and external factors. These factors can directly or indirectly affect the firm value. This study aims to prove empirically the determinants of firm value as measured by using the Price to Book Value (PBV) in the food and beverage (F&B) industry listed on the Indonesia Stock Exchange (ISE). The estimated determinants include Total Asset Turnover (TATO), company size (SIZE), Current Ratio (CR), Return on Equity (ROE), and Debt to Equity Ratio (DER). The research method used is a panel data regression model with a sample of 17 companies in the F&B sector from 2015 to 2019. The results of the study conclude that the increase in the TATO, CR, and Size factors results in a decrease in firm value, while the impact of ROE and DER factors on the contrary causes PBV to increase. Taken together, all of the estimated determinants affect firm value. The practical implication of the research findings for the company is that if profitability increases, the increase in total debt can increase firm value. However, the use of debt must be allocated for investment in both current assets and fixed assets, if these assets are used efficiently to generate profits so that it has an impact on increasing company value.
Keywords
Firm Value; Food and Beverage (F&B) Companies; Price-Book Value (PBV); Indonesia;
Citations & Related Records
연도 인용수 순위
  • Reference
1 Nguyen, L. T., Nguyen, A. H. V., Le, H. D., Le, A. H., & Truong, T. T. V. (2020). The factors affecting corporate income tax non-compliance: A case study in Vietnam. Journal of Asian Finance, Economics, and Business, 7(8), 103-115. https://doi.org/10.13106/jafeb.2020.vol7.no8.103   DOI
2 Soetjanto, J. R., & Thamrin, H. (2020). Analysis of factors that affect the firm value of consumer goods industry listed on Indonesia stock exchange. International Journal of Scientific and Research Publications, 10(5), 1-9. http://doi.org/10.29322/IJSRP.10.05.2020.p10102   DOI
3 Tagesson, T., Blank, V., Broberg, P., & Collin, S. O. (2009). What explains the extent and content of social and environmental disclosures on corporate websites: A study of social and environmental reporting in Swedish listed corporations. Corporate Social Responsibility and Environmental Management, 16(6), 352-364. https://doi.org/10.1002/csr.194   DOI
4 Dwi, R. K., Azis, D., Muh, I., & Miswar, A. R. (2018). Effects of return on asset, return on equity, earning per share on corporate value. The International Journal of Engineering and Science, 7(1), 6-14. http://www.theijes.com/papers/vol7-issue3/Version-1/B0703010614.pdf
5 Purba, M. N., Sinurat, E. K., Djailani, A., & Farera, W. (2020). The effect of current ratio, return on assets, total asset turnover, and sales growth on capital structure in manufacturing company. International Journal of Social Science and Business, 4(3), 497-508. https://ejournal.undiksha.ac.id/index.php/IJSSB/article/view/27958
6 Razak, A., Nurfitriana, F. V., Wana, D., Ramli, R., Umar, I., & Endri, E. (2020). The effects of financial performance on stock return evidence of machine and heavy equipment companies in Indonesia. Research in World Economy, 11(6), 131-138. https://doi.org/10.5430/rwe.v11n6p131   DOI
7 Renaldi, J. Y., Pinem, D. B., & Permadhy, Y. T. (2020). Analysis of factors affecting the value of manufacturing industry companies in the Indonesian Stock Exchange (IDX). European Journal of Business and Management Research, 5(1), 1-8. http://doi.org/08.0220/ejbmr.2020.5.1.230
8 Karaca, S. S., & Savsar, A. (2012). The effect of financial ratios on the firm value: Evidence from Turkey. Journal of Applied Economic Sciences, 7(1), 56-63. http://www.jaes.reprograph.ro/articles/Spring2012/articles/Karaca,SuleymanSerdar;Savsar,Arif.pdf
9 Kemenperin. (2015). RI's food and beverage industry grow 8.16%. https://kemenperin.go.id/artikel/12163/Industri-Makanan-dan-Minuman-RI-Tumbuh-8,16
10 Mukhibad, H., Subowo, S., Maharin, D. O., & Mukhtar, S. (2020). Determinants of debt policy for public companies in Indonesia. Journal of Asian Finance, Economics, and Business, 7(6), 29-37. https://doi.org/10.13106/jafeb.2020.vol7.no6.029   DOI
11 Endri, E. (2019). Determinant of firm's value: evidence of manufacturing sectors listed in Indonesia Shariah stock index. International. Journal of Recent Technology and Engineering, 8(3), 3995-3999. https://doi.org/10.35940/ijrte.C5258.098319   DOI
12 Endri, E., & Fathony, M. (2020). Determinants of firm's value: Evidence from the financial industry. Management Science Letters, 10(1), 111-120. https://doi.org/10.5267/j.msl.2019.8.011   DOI
13 Endri, E., Sari, A. K., Budiasih, Y., Yuliantini, Y., & Kasmir, K. (2020). Determinants of profit growth in food and beverage companies in Indonesia. Journal of Asian Finance, Economics, and Business, 7(12), 739-748. https://doi.org/10.13106/jafeb.2020.vol7.no12.739   DOI
14 Harahap, I. M., Septiania, I., & Endri, E. (2020). Effect of financial performance on firms' value of cable companies in Indonesia. Accounting, 6(6), 1103-1110. https://doi.org/10.5267/j.ac.2020.7.008   DOI
15 Susanti, N., & Restiana, N. G. (2018). What's the best factor to determining firm value? Jurnal Keuangan dan Perbankan, 22(2), 301-309. https://doi.org/10.26905/jkdp.v22i2.1529   DOI
16 Djamaluddin, S., Maryadi, & Marsoem, B. (2018). The effect of the fundamental factors against price to book value on building construction sub-sector companies in Indonesia stock exchange period 2012-2016. International Journal of Innovative Research & Development, 7(11), 149-156. https://doi.org/10.24940/ijird/2018/v7/i11/OCT18056   DOI
17 Putu, N. N. G. M., Moeljadi, D., & Djazuli, A. (2014). Factors affecting firms value of Indonesia public manufacturing firms. International Journal of Business and Management Invention, 3(2), 35-44. http://www.ijbmi.org/papers/Vol(3)2/Version-1/F0321035044.pdf
18 Reverte, C. (2009). Determinants of corporate social responsibility disclosure ratings by Spanish listed firms. Journal of Business Ethics, 88(2), 351-366. https:/doi.org/10.1007/s10551-008-9968-9   DOI
19 Rosikah., M., Prananingrum, D. K., Muthalib, D. A., Azis, M. I., Rohansyah, M. (2018). Effects of return on asset, return on equity, earning per share on corporate value. The International Journal of Engineering and Science (IJES), 7(3), 6-14. https://doi.org/10.9790/1813-0703010614
20 Shahnia, C., Purnamasari, E. P., Hakim, L., & Endri, E. (2020). The determinant of profitability: Evidence from trading, service, and investment companies in Indonesia. Accounting, 6(5), 787-794. https://doi.org/10.5267/j.ac.2020.6.004   DOI
21 Siregar, S.V., & Bachtiar, Y. (2010). Corporate social reporting: empirical evidence from Indonesia stock exchange. International Journal of Islamic and Middle Eastern Finance and Management, 3(3), 241-252. https://doi.org/10.1108/17538391011072435   DOI
22 Utami, E. S., & Hasan, M. (2021). The role of corporate social responsibility on the relationship between financial performance and company value. Journal of Asian Finance, Economics, and Business, 8(3), 1249-1256. https:// doi.org/10.13106/jafeb.2021.vol8.no3.1249   DOI
23 Kristi, N.M. & Yanto, H. (2020). The effect of financial and non-financial factors on firm value. Accounting Analysis Journal, 9(2), 131-137. https://doi.org/10.15294/aaj.v8i2.37518   DOI
24 Kemenperin. (2016). The food and beverage industry grows 9.8 percent in the third quarter of 2016. Accessed on 26 August 2020, from https://www.kemenperin.go.id/artikel/16650/Industri-Makanan-dan-Minuman-Tumbuh-9,8-Persen-Triwulan-III-2016
25 Kemenperin. (2018). The Mamin industry has the potential to grow positively in the political year. https://kemenperin.go.id/artikel/18727/Industri-Mamin-Berpotensi-Tumbuh-Positif-di-Tahun-Politik
26 Kemenperin. (2019). The food and beverage industry becomes a champion sector. https://kemenperin.go.id/artikel/20298/Industri-Makanan-dan-Minuman-Jadi-Sektor-Kampiun
27 Marsha, N., & Murtaqi, N (2017). The effect of financial ratios on firm value in the food and beverage sector of the IDX. Journal of Business and Management, 6(2), 214-226. https://journal.sbm.itb.ac.id/index.php/jbm/article/download/2155/1127
28 Myers, S., & Rajan, R. (1998). The paradox of liquidity. The Quarterly Journal of Economics, 113(3), 733-771. https://doi.org/10.1162/003355398555739   DOI
29 Siregar, R., & Dewi, A. (2019). Analysis of the effect of fundamental financial ratio of ROA, DER, CR, TATO, and PBV on stock return of plantation sub-sector industry at IDX 2014 - 2017. International Journal of Innovative Science and Research Technology, 4(7), 405-414. https://ijisrt.com/assets/upload/files/IJISRT19JUL077_(3).pdf.pdf
30 Myers, S. C. (1984). The capital structure puzzle. Journal of Finance, 39(3), 573-592. https://doi.org/10.1111/j.1540-6261.1984.tb03646.x   DOI
31 Nurlaela, S., Mursito, B., Kustiyah, E., Istiqomah., & 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   DOI
32 Chabachib, M., Hersugondo, H., Ardiana, E., & Pamungkas, I. D. (2020). Analysis of company characteristics of firm values: Profitability as intervening variables. International Journal of Financial Research, 11(1), 60-70. https://doi.org/10.5430/ijfr.v11n1p60   DOI
33 Hermuningsih, S. (2013). Profitability, growth opportunity, capital structure, and firm value. Bulletin of Monetary Economics and Banking, 16(2), 115-136. https://doi.org/10.21098/bemp.v16i2.440   DOI
34 Jedrzejczak-Gas, J. (2018). Determinants of the capital structure of TSL sector enterprises. Management, 22(1), 122-139. https://doi.org/10.2478/manment-2018-0013   DOI
35 Sunaryo, S., Alvia, S., Endri, E., & Harahap, M. N. (2020). Determinants of capital adequacy ratio for pension funds: A case study in Indonesia. International Journal of Financial Research, 11(4), 203-213. https://doi.org/10.5430/ijfr.v11n4p203   DOI
36 Hapsoro, D., & Falih, Z. N. (2020) The effect of firm size, profitability, and liquidity on the firm value moderated by carbon emission disclosure. Journal of Accounting and Investment, 21(2), 240-257. https://doi.org/10.18196/jai.2102147   DOI
37 Jihadi, M., Vilantika, E., Hashemi, S.M., Arifin, Z., Bachtiar, Y., & Sholichah, F. (2021). The effect of liquidity, leverage, and profitability on firm value: Empirical evidence from Indonesia. Journal of Asian Finance, Economics, and Business, 8(3), 423-431. https://doi.org/0.13106/jafeb.2021.vol8.no3.0423   DOI
38 Olokoyo, F. O. (2013). Capital structure and corporate performance of Nigerian quoted firms: A panel data approach. African Development Review, 25(3), 358-369. https://doi.org/10.1111/j.1467-8268.2013.12034.x   DOI
39 Akhtar, W. M., Khan, F. A., Shahid, A., & Ahmad, J. (2015). Effects of debt on the value of a firm. Journal of Accounting & Marketing, 5(4), 1-4. https://doi.org/10.4172/2168-9601.1000202   DOI
40 Arkan, T. (2016). The importance of financial ratios in predicting stock price trends: A case study in emerging markets. Finanse, Rynki Finansowe, Ubezpieczenia, 79, 13-26. https://doi.org/10.18276/frfu.2016.79-01   DOI
41 Gujarati, D. N. (2012). Basic econometrics. Noida: Tata McGrawHill Education