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Research Article Open access CC BY 4.0

Analysis of Profitability Determinants and Effect Value of Automotive Companies in Indonesia

Sulistiyani, Noor Salim

Asian Journal of Economics, Business and Accounting · pp. 26–35 · Published 19 Aug 2022

10.9734/ajeba/2022/v22i2230707

Abstract

The study analyzes the financial performance of automotive companies' firm value on the Indonesia Stock Exchange. The financial performance is DER, CR, and company size. The secondary data was a company report, which is eight companies. The panel data regression using Eviews 11.0 to analyze hypotheses. The finding of the t-test of the DER, CR and Firm size negatively and significantly affect profitability; therefore, profitability on firm value has no significant impact. Partially DER positively affects firm value; CR and size have no significant effect on firm value. Profitability as a mediating increases the impact of DER, CR, and firm size on firm value. CR, and firm size, have a positive and significant effect on firm value. The Company should pay attention to the liquidity ratio because the most influential in reducing profitability in the future. Therefore, the investors must check the company's cashflow in order to understand company's liquidity level.

Profitability Debt to Equity Ratio (DER) Current Ratio (CR) firm size firm value

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