Effect of Financial Performance and Good Corporate Governance on Value of Company

Abstract

This study aimsato Determine and analyzeathe influence of financialaperformance (returnson investment and return on equity) and good corporate governance (managerial ownership, independent board of commissioner, and the auditacommittee) to the value of the company. The population insthissstudysaresallsmanufacturingscompaniedslistedsonsthesIndonesia Stock Exchange period 2014 to 2016. Sampling technique in this study using purposive samplingsmethod, Obtained a sample of 19 companies over three periods, the resulting in a total sample of 57. Data analysis techniques used is using multiplearegressionaanalysis. The results of the feasibility study models (F test) shows that the variables return on investment, return on equity, managerial ownership, independent boardaofaCommissioners, andatheaauditacommittee influence the value of the company. The result of hypothesis test (t test) shows that the variable of return on investment, return on asset, and independent board of commissioner influence to firm value, while managerial ownership variable and audit committee have no effect to company value.

Factors That Influence On The Price To Book Value Of The Company In Indonesia Stock Exchange

“…The formation of an audit committee of a company is sometimes a formality (Raharja, 2014). This study's results are consistent with research conducted by Yefni et al (2017), Ratnasari et al (2018), Raharja (2014), and Sukmadijaya and Cahyadi (2017).…”

“…It follows agency theory, which explains that the government has other goals contrary to its main objectives. The results of this study are consistent with research conducted by Rasyid (2015), Ratnasari et al (2018), Negara (2019), and Sumanti and Mangantar (2015).…”

“…It means that managerial ownership does not affect firm value. Ratnasari et al (2018) stated that this was caused by management performance that was not optimal. Due to differences in interests between management and investors.…”

“…Managerial ownership is a proportion of shareholders from management who actively participate in decision-making companies, namely the directors and commissioners. Managerial ownership is one of the corporate governance mechanisms that can reduce agency costs (Ratnasari et al, 2018). Managerial ownership often associated as an effort to increase the value of the company late because the manager than as management as well as the owner of the company will feel the direct result of his decision so the manager would not commit acts which only benefit managers (Suastini et al, 2016).…”

Pengaruh Good Corporate Governance Dan Kinerja Keuangan Terhadap Nilai Perusahaan

“…Kinerja keuangan merupakan gambaran kondisi keuangan suatu perusahaan pada suatu periode tertentu baik dalam kaitannya dengan aspek penghimpunan dana maupun penyaluran dana, yang biasanya diukur dengan indikator kecukupan modal, likuiditas, dan profitabilitas (Ratnasari, Chomsatu Samrotun, & Wijayanti, 2018). Kinerja keuangan merupakan suatu analisis yang dilakukan KA = KINST = untuk melihat sejauh mana suatu perusahaan telah melaksanakan, dengan menggunakan kaidah kinerja keuangan yang baik dan benar.…”