Abstract
The purpose of this study is to determine the influence of the company’s external factors with proxies: inflation and interest rates, and the company’s internal factors with proxies: Return on Equity, and Debt to Equity Ratio partially and simultaneously to firm value in insurance sector companies listed on the Stock Exchange Indonesia. The research method used in this study is quantitative research methods, with the object of research of insurance companies listed on the Indonesia Stock Exchange, amounting to 14 companies. This study used a purposive sampling technique that produced 8 companies as the research sample. The research data source uses secondary data in the form of documents including data about the company’s general description and financial statements of insurance companies on the Indonesia Stock Exchange (IDX) for 5 years. The results of this study indicate inflation, interest rates, Return on Equity, and Debt to Equity Ratio simultaneously have a positive but not significant effect on company value, then partially the other 3 variables, namely inflation, interest rates, and Debt to Equity Ratio have a positive effect but not significant to firm value, while variable Return on Equity has a positive and significant effect on firm value. Based on the coefficient of determination of 0.138 this shows the influence of 4 variables, namely inflation, interest rates, return on equity, debt to equity ratio of 13.8% while the remaining 86.2% is influenced by other factors, for example: the level of competition, policy company, developments in macroeconomic conditions.
Highlights
In the era of industrial revolution 4.0 competition between companies was increasingly competitive, including companies in Indonesia competing to enhance high competitiveness and excellence in the business and economic world
The development of the insurance industry in Indonesia is quite prospective, the general insurance industry has the opportunity to grow by double digits in 2019, this estimate is strongly influenced by the political situation year
While the independent variables used in this study are the company's external factors which include: Inflation, Interest Rates, and internal company factors which include: profitability as measured by Return On Equity (ROE), and debt as measured by Debt To Equity Ratio (DER) which is associated with an assessment of the value of the company
Summary
In the era of industrial revolution 4.0 competition between companies was increasingly competitive, including companies in Indonesia competing to enhance high competitiveness and excellence in the business and economic world. Competition between companies is not except with insurance companies. The increasing prevalence of insurance companies in Indonesia makes competition very tight to make its existence in the insurance world. Every normal human being must have aspirations to always improve or improve their standard of living in order to pursue physical and spiritual wellbeing. The development of the insurance industry in Indonesia is quite prospective, the general insurance industry has the opportunity to grow by double digits in 2019, this estimate is strongly influenced by the political situation year. If the election runs well and is conducive, post-election economic activities are believed to be able to run faster (Julian Noor, 2018)
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