Influence of managed and unmanaged operating and financial performance on firm value

I. Putu Sugiartha Sanjaya, Si Made Kanaka Putri Jelantik Padma Sanjaya and I. Gede Siswantaya

International Journal of Monetary Economics and Finance, 2025, vol. 18, issue 2/3, 119-128

Abstract: This study empirically examines whether managed and unmanaged operating and financial performance influence firm value. Managed operating and financial performance proxied return on assets (ROA) and return on equity (ROE). Unmanaged operating performance is ROA minus accrual and real earnings management. Unmanaged financial performance is ROE minus accrual and real earnings management. This study uses Tobin's Q to measure firm value. Data is collected from the Indonesia Stock Exchange (IDX) and yahoofinance.com. This study uses a purposive method for manufacturing companies at the IDX from 2018 to 2020 and provides empirical evidence that managed operating and financial performance does not influence firm value. Unmanaged operating performance positively influences firm value. The implication of this study for the international market is that investors in the global capital market should be more prudent when analysing financial reports related to company performance, which contain choices of accounting policies and real activities with opportunistic intentions.

Keywords: managed; unmanaged; operating; financial; firm value. (search for similar items in EconPapers)
Date: 2025
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