The Influence of Risk on the Value of Companies in the Textile/Garment Industry Listed on the Indonesia Stock Exchange 2020-2021

Abstract

High company risk can lead to wrong investor decisions, as it can reflect a high likelihood of company failure. Risk management becomes important to minimize the adverse impact of risks on company operations and increase company value for shareholder wealth. This research aims to examine the effect of risk on company value in the Textile/Garment industry on the Indonesia Stock Exchange. The study used secondary data with a quantitative descriptive analysis method using STATA17 software. The sample size in this study was 18 companies. The results of the study proved that business risk has a significant negative effect on the value of Textile/garment industry companies listed on the Indonesia Stock Exchange. The higher the business risk faced by a company, the lower its value.

The Influence of Company Growth, Capital Structure, and Business Risk on Company Value with Company Size as a Moderating Variable in Property and Real Estate Sector Companies on the Indonesia Stock Exchange

“…Business risks are also the result of failures in the company's internal controls, which can lead to losses and management failure to ensure adequate returns to the company. This is in line with and supports the results of previous research conducted by (Alamsyah & Malanua, 2021;Ningsih, 2023;Pujakesuma, 2022). This research proves that business risk has a negative effect on the value of property and real estate companies on the Indonesia Stock Exchange.…”

“…Previous research such as (Azzahra et al, 2022;Fuadi et al, 2022;Wardani & Machdar, 2023) shows that business risk has a positive effect on company value. However, there are differences in research results from (Alamsyah & Malanua, 2021;Ningsih, 2023;Pujakesuma, 2022) which show that business risk has a negative effect on company value.…”