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KCI등재 학술저널

Determinants of Firm Value

There are many factors that affect the firm value, both internal and external factors. These factors can directly or indirectly affect the firm value. This study aims to prove empirically the determinants of firm value as measured by using the Price to Book Value (PBV) in the food and beverage (F&B) industry listed on the Indonesia Stock Exchange (ISE). The estimated determinants include Total Asset Turnover (TATO), company size (SIZE), Current Ratio (CR), Return on Equity (ROE), and Debt to Equity Ratio (DER). The research method used is a panel data regression model with a sample of 17 companies in the F&B sector from 2015 to 2019. The results of the study conclude that the increase in the TATO, CR, and Size factors results in a decrease in firm value, while the impact of ROE and DER factors on the contrary causes PBV to increase. Taken together, all of the estimated determinants affect firm value. The practical implication of the research findings for the company is that if profitability increases, the increase in total debt can increase firm value. However, the use of debt must be allocated for investment in both current assets and fixed assets, if these assets are used efficiently to generate profits so that it has an impact on increasing company value.

1. Introduction

2. Literature Review

3. Research Method

4. Results

5. Discussion

6. Conclusion

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