Management’s Company Value Based Capital Structure, Liquidity Ratio, Coverage, Activity through Financial Performance

Ainun Jariah (), Sukma Irdiana () and Ninik Lukiana ()
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Ainun Jariah: Institut Teknologi dan Bisnis Widya Gama, Management Departemen
Sukma Irdiana: Institut Teknologi dan Bisnis Widya Gama, Management Departemen
Ninik Lukiana: Institut Teknologi dan Bisnis Widya Gama, Management Departemen

A chapter in Proceedings of the Conference on SDGs Transformation Through the Creative Economy: Encouraging Innovation and Sustainability (TCEEIS 2023), 2023, pp 3-9 from Springer

Abstract: Abstract Encouraging performance synonymous with an increase in company value. Because this is the same as achieving the company’s primary objective, maximizing company value is crucial for a business. Increasing the value of firm accomplishments in line with owner wishes since owner welfare will be ensured automatically. Investors’ assessment of a company’s success level, is frequently linked to stock prices. A high stock price is a sign of a valuable corporation. The purpose of this research is to explore and analyze how capital structure, liquidity ratios, coverage, and activity are related to financial performance and firm value. It also demonstrates the importance of financial performance as a mediator between these factors and firm value. Out of 16 automotive firms, a total of 13 are listed on the Indonesia Stock Exchange from 2018 to 2021. Using path analysis for hypothesis testing, Sobel test for mediation hypothesis testing. Results showed only financial performance had an impact on the firm’s worth, coverage ratio had an impact on financial results. The financial performance was unable to mediate the relationship between capital structure, liquidity, coverage, activity ratio, and firm value. A novelty study compares two states, particularly those before and after the Covid-19 epidemic.

Keywords: Activity Ratio; Capital Structure; Coverage; Financial Performance; Liquidity (search for similar items in EconPapers)
Date: 2023
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DOI: 10.2991/978-94-6463-346-7_2

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