The The Effect of Current Ratio and Debt to Equity Ratio on Company Value with Return on Asset as Intervening Variable in Food and Beverage Companies Listed on the Indonesia Stock Exchange for Period 2017-2020

Abstract

The food and beverage sector is a sector that is in great demand by investors, considering that business developments in this sector continue to experience significant growth, which is the main attraction for local and foreign entrepreneurs to invest in this sector. The rapid development of the food and beverage sector will make companies compete with each other in order to maintain and increase company value. This effort is certainly a problem for the company, because it relates to the funds that will be used. The purpose of this study was to examine and analyze the effect of the current ratio and debt to equity ratio on firm value through return on assets. The method used in this research is quantitative research, and the nature of the research is explanatory. The data collection technique used is documentation. The types and sources of data are secondary data in the form of financial statements of companies in the food and beverage sector published by the Indonesia Stock Exchange for the period 2017-2020. The research data was tested using Partial Least Square (Software Smart PLS). the conclusion of this study is that the current ratio and debt to equity ratio have no effect on company value. Return on assets is not able to mediate the effect of the current ratio on company value. Return on assets is able to mediate the effect of debt to equity ratio on company value.

Determination of Earnings Quality and Firm Value: New Evidence from Indonesian Non-financial Companies

“…The results of this test proved that the working capital ratio had a negative and insignificant effect on the firm value, so H5c is rejected. The findings of this study agree with the research (Sari & Seanda, 2020;Erdiyaningsih et al, 2021;Shalini et al, 2020;Tampubolon et al, 2021;Sari, 2022;Azizah & Cahyono, 2022;Ratnasari, 2022;and Afanny et al, 2022). However, there is a discrepancy in the research of Jihadi et al (2021), Hasanudin et al (2020), Purba and Mahendra (2022), Khusnurifaq (2022), Sembiring (2022), andNirawati et al (2022) which explains that the working capital ratio has a significant positive effect on the value of the company.…”

“…The findings of this study are in line with the results of the study (Susanti & Restiana, 2018;Jihadi et al, 2021;Stevani & Pernamasari, 2019;Tampubolon et al, 2021;Hasanudin et al, 2020;Setiawan et al, 2021;Khusnurifaq, 2022;Sari, 2022;Azizah & Cahyono, 2022;and Ratnasari, 2022). However, it is not in the same direction as the research of Komarudin and Affandi (2019), Tahu and Susilo (2017), Waryati et al (2018), Muzayin and Trisnawati (2022), Rahmaandi and Wulandari (2022), Afanny et al (2022), Dewi and Sembiring (2022), Arrozi (2022) who stated that current debt to total assets has no significant effect on firm value. As for research from Kristi and Yanto (2020), Shalini et al (2020), Darmawan et al (2020), Purba and Mahendra (2022), Dewi and Susanto (2022), and Devina and Purnama (2022) found negative correlations.…”

“…The increase and decrease in firm value can also be influenced by the presence of several factors that act as the basis for investment considerations for stakeholders. For example, firm size (Tiara & Jayanti, 2022;Susanti & Restiana, 2018;Dewi & Sembiring, 2022), firm growth (Faizra et al, 2022;, working capital ratio (Nirawati et al, 2022;Devina & Purnama, 2022;Afanny et al, 2022), cash to current assets (Saleh et al, 2020), current debt to total assets (Sari, 2022;Purba & Mahendra, 2022;Larasati & Arrozi, 2022), earnings per share (Putri & Anwar, 2022;Dewi & Susanto, 2022), firm age Muzayin & Trisnawati, 2022), listing age (Tiara & Jayanti, 2022;Annisa & Praptoyo, 2022), price earnings ratio (Ratnasari, 2022;Hulasoh & Mulyati, 2022), market capitalization (Lathifatussulalah & Dalimunthe, 2022;Rahmanissa & Isynuwardhana, 2022), corporate social responsibility award (Benjamin & Biswas, 2022;Sentya & Mardianto, 2022), managerial capability (Doukas & Zhang, 2020;Wiranudirja et al, 2022), and earnings management (Prabowo, 2022;Rajab et al, 2022;Putry & Murni, 2022).…”

The Effect of Debt-to-Equity Ratio, Return on Asset, Current Ratio, and Total Asset Turnover on Stock Price: The Intervening Effect of Intrinsic Value in Indonesia’s Retail Business

“…Both studies affirm that the debt-to-equity ratio has a positive and significant effect on the price-to-earnings ratio, which serves as a proxy for intrinsic value. However, the results contradict the research of Afanny (2022) and Alvian and Munandar (2022) indicating that the Debt-to-Equity Ratio does not affect the firm's value.…”

Pengaruh Keputusan Investasi, Keputusan Pendanaan, dan Kebijakan Dividen pada Jakarta Islamic Index Tahun 2018-2022

“…Modigliani dan Miller (MM) (11) mengemukakan bahwa tingkat hutang tidak memiliki relevansi dan tidak mempengaruhi struktur modal yang optimal. Hasil penelitian ini sejalan dengan penelitian yang dilakukan oleh Amaliyah dan Herwiyanti (12) serta Afanny et.al (13) yang menyatakan bahwa keputusan pendanaan (DER) tidak mempunyai pengaruh secara parsial terhadap nilai perusahaan (Tobin's Q).…”