The Influence of Capital Structure, Profitability, and Company Size on Firm Values in Manufacturing Companies Listed on the Indonesia Stock Exchange

Thomas Sumarsan Goh, Melanthon Rumapea

2019

Abstract

The value of the company is achieved when an investment generates a rate of return that is greater than the investment risk. By increasing the value of the companies, shareholders’ value will also increase, which is indicated by the high return on investment to shareholders. Several factors that can influence firm values are capital structure, profitability, and the size of the companies. Financial risk is a risk that affects the financial aspects of the company. And market risk is the risk that occurs due to business competition with the emergence of potential new competitors in the market of the same product. The population of the study was 61 and 12 companies were selected to be the samples through purposive sampling technique. The data were analyzed by using descriptive statistics technique. From the results of the study, it can be concluded, that capital structure has a significant effect on firm value, but has a negative coefficient direction. Even though the capital structure of a company has decreased, but the value of the company may not necessarily decline. Profitability has a positive and significant effect on firm value, and firm size has a positive and significant impact on firm value. Capital structure, profitability, and company size simultaneously have a significant impact on firm value.

Paper Citation

in Harvard Style

Goh T. and Rumapea M. (2019). The Influence of Capital Structure, Profitability, and Company Size on Firm Values in Manufacturing Companies Listed on the Indonesia Stock Exchange. In Proceedings of the 2nd Economics and Business International Conference - Volume 1: EBIC, ISBN 978-989-758-498-5, pages 446-456. DOI: 10.5220/0009216104460456

in Bibtex Style

@conference{ebic19,
author={Thomas Sumarsan Goh and Melanthon Rumapea},
title={The Influence of Capital Structure, Profitability, and Company Size on Firm Values in Manufacturing Companies Listed on the Indonesia Stock Exchange},
booktitle={Proceedings of the 2nd Economics and Business International Conference - Volume 1: EBIC,},
year={2019},
pages={446-456},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0009216104460456},
isbn={978-989-758-498-5},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 2nd Economics and Business International Conference - Volume 1: EBIC,
TI - The Influence of Capital Structure, Profitability, and Company Size on Firm Values in Manufacturing Companies Listed on the Indonesia Stock Exchange
SN - 978-989-758-498-5
AU - Goh T.
AU - Rumapea M.
PY - 2019
SP - 446
EP - 456
DO - 10.5220/0009216104460456