Strategic to Increase Firm Value with Earning Per Share and Current Ratio

Abstract

This study aims to determine the strategy of increasing firm value with earnings per share and current ratio. The research method uses descriptive statistics, and SEM PLS analysis uses a moderation model. The sample of this research is the consumer goods industry listed on the Indonesia Stock Exchange for the 2016-2018 period. The sampling criteria used purposive sampling with 33 observations. The results of the study show that model I consists of Earning per share on firm value with a return of equity as moderating coefficient −0.47 and p-value < 0.01, which explains that return of equity weakens the relationship between Earning per share firm value. Model II has the result that the current ratio to solid deal with the return of equity as moderating is a coefficient of 0.36 and pvalue < 0.01, which explains that the return of equity strengthens the relationship between the current ratio and firm value. Based on the results of the study that Model II states that companies with higher current ratios lead to the increased investor and creditor confidence in the company so that the company has the motivation to increase the value of the company to pay off the company's debts and can reduce the taxes that the company must pay.