Relationship Between Profitability, Investment Decisions On Firm Value: A Study Of Listed Banks In Indonesia

Sa’diyah, Chalimatuz

doi:10.21070/jbmp.v7i2.1469

Cited by 9 publications

(7 citation statements)

References 16 publications

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“…This shows that efficient state-owned banks are characterized by the maximum role of inputs in producing output. State-owned banks still need to supervise managerially in managing the use of deposits, capital, and costs (Sa'diyah, 2021). State-owned banks can also evaluate the allocation of deposit inputs to productive assets to obtain greater profits, so that they can channel greater credit to the community.…”

Section: Resultsmentioning

confidence: 99%

Efficiency Analysis of State-Owned Enterprise Bank Using Stochastic Frontier Analysis (SFA) Approach

Putri¹,

Rahadjeng²,

Irawati³

2022

Jamanika

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The purpose of the study was to determine the level of efficiency of state-owned banks for the 2019-2021 period. This research is a descriptive study with a quantitative approach that uses secondary data from the Financial Statements of State-owned Banks for the 2019-2021 period on the research object of PT. Bank Negara Indonesia Tbk., PT. Bank Rakyat Indonesia Tbk., PT. Bank Tabungan Negara Tbk., and PT. Bank Mandiri Tbk., obtained from the website of the Financial Services Authority. The data processed is data for the quarter of 2019 to the third quarter of 2021. The efficiency calculation is carried out using the Parametric Approach Stochastic Frontier Analysis which is processed using STATA 17. The results of the study using calculations show that state-owned banks in the 2019-2021 period have an average efficiency level of 0.9955 or close to 1. The results of these calculations indicate that state-owned banks are efficient in managing inputs into optimal output. State-owned banks that have the highest efficiency scores are Bank BRI and Bank Mandiri, followed by Bank BNI, then Bank BTN. State-owned banks still need to supervise managers and evaluate the allocation of deposits to productive assets to obtain greater profits to improve the overall economy.

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Section: Resultsmentioning

confidence: 99%

Efficiency Analysis of State-Owned Enterprise Bank Using Stochastic Frontier Analysis (SFA) Approach

Putri¹,

Rahadjeng²,

Irawati³

2022

Jamanika

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“…Furthermore, investment determination is the most critical decision to increase the company's value (Lv et al, 2021;Sa'diyah, 2021;Nguyen & Dong, 2013). The fundamental investment decision is to allocate funding sources (Syahyunan, 2013).…”

Section: Pecking Order Theory (Pot)mentioning

confidence: 99%

Fundamental Factors of Financial Ratios and Discretionary Accruals in Influencing the Companies’ Fixed-Asset Investment Decisions

Rosa

Mukhibad

2022

JAI

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Research aims: This study aims to empirically prove the influence of profitability, solvency, liquidity, activity, dividend policy, and discretionary accruals on fixed-asset investment decisions.Design/Methodology/Approach: The researchers used consumer goods companies listed on the Indonesia Stock Exchange (IDX) from 2013 to 2019. Using the purposive sampling method, this study resulted in 163 bank-year observations. The data were then analyzed utilizing a fixed-effect model.Research findings: The results showed that profitability, liquidity, activity, and discretionary accruals positively affected fixed-asset investment. Meanwhile, the dividend policy negatively affected fixed-asset investment. This study strengthens the pecking order theory. In addition, the research sample used internal funds as a funding source for investment in fixed assets.Theoretical contribution/Originality: The variable added in the study distinguishing it from previous researchers is the discretionary accrual variable. Discretionary accruals have been proven to impact resource allocation, one of which is investment decisions. The additional discretionary accruals variable is expected to strengthen the influence of the consumer goods companies' fundamental factors on investment decisions in fixed assets.Practitioner/Policy implication: Investment in fixed assets in the consumer goods companies uses internal funds because these funds are low risk and support the company's sustainability.Research limitation/Implication: This study used dividend policy as one of the independent variables, and companies that did not distribute dividends could not be sampled.

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“…Previous studies that measure firm value using Price to Book Value (PBV) were such [18,9,11,19,12,20,10].…”

Section: Firm Valuementioning

confidence: 99%

The Influence of Profitability and Liquidity on Firm Value (Case Study on a Non-financial Company Indexed ESG Quality 45 IDX-Kehati on the Indonesia Stock Exchange 2017-2020)

Akbar

Nusa

Iriyadi³

2022

AJEBA

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Aims: This study aims to determine the influence of Profitability and Liquidity on Firm Value, as previous research results were inconclusive, inconsistent, and sometimes contradictory. Study Design: This research is quantitative correlational research using multiple linear regression. Methodology: This study uses 35 non-financial companies indexed ESG Quality 45 IDX-Kehati listed on the Indonesia Stock Exchange for 2017-2020. The cross-sectional data are analyzed by SPSS version 25. Results: This study provides empirical evidence that profitability (ROA) positively and significantly impacts firm value (PBV). As the coefficient value of ROA is +0.115, it means that every a hundred percent increase in Profitability (ROA) will increase the stock price or Firm Value (PBV) by 11.5%. Unexpectedly, the Liquidity (CR) does not affect firm value. Conclusions: Return on assets as a proxy for profitability ratios has a positive and significant effect on increasing stock market prices to the book value ratio as a proxy for firm value. In contrast, the liquidity ratio does not affect the increase in stock prices. These findings indicate that investors and capital market analysts are more concerned with profitability than liquidity. Therefore, managers and directors must generate maximum net profit by increasing the productivity of all company assets. The limitation of this study is that the sample is small and only uses two predictor variables, so the coefficient of determination (R2) is 28%. For further research, adding other predictor variables and control variables is recommended.

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Relationship Between Profitability, Investment Decisions On Firm Value: A Study Of Listed Banks In Indonesia

Cited by 9 publications

References 16 publications

Efficiency Analysis of State-Owned Enterprise Bank Using Stochastic Frontier Analysis (SFA) Approach

Efficiency Analysis of State-Owned Enterprise Bank Using Stochastic Frontier Analysis (SFA) Approach

Fundamental Factors of Financial Ratios and Discretionary Accruals in Influencing the Companies’ Fixed-Asset Investment Decisions

The Influence of Profitability and Liquidity on Firm Value (Case Study on a Non-financial Company Indexed ESG Quality 45 IDX-Kehati on the Indonesia Stock Exchange 2017-2020)

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