Abstract
This study aims to find out: (1) Effect of Current Ratio (CR), Debt to Equity Ratio (DER), inflation and the IDR exchange rate on Return on Assets (ROA); (2) Effect of Current Ratio (CR), Debt to Equity Ratio (DER), inflation and the IDR exchange rate against Price to Book value (PBV); (3) Effect of Return on Assets (ROA) on Price to Book value (PBV); (4) Role of Return on Assets ROA as an intervening variable between Current Ratio (CR), Debt to Equity Ratio (DER), inflation and the IDR exchange rate with Price to Book value (PBV). The research sample is the automotive sub-sector manufacturing company and its components in the period 2008-2017 as many as 9 companies. The results of the study with panel data show that simultaneously CR, DER, inflation and the rupiah exchange rate affect ROA, partially CR and inflation have no significant effect on ROA, while DER and the IDR exchange rate have a significant effect on ROA. Simultaneously CR, DER, inflation and the IDR exchange rate affect PBV, partially CR, DER and inflation have no significant effect on PBV, while the IDR exchange rate has a significant effect on PBV. 12. The role of ROA as an intervening variable is very important in increasing the influence of CR, DER, inflation and the IDR exchange rate against Price to Book Value (PBV).
Highlights
The function of financial management is basically to take several decisions in the financial sector
Darmadji and Fakhrudin (2011: 141), explain that corporate value can be measured by Price to Book Value
Multicollinearity test is recommended to look at the Variance Inflation Factor (VIF) value, if the VIF value is less than 10, there is no multicollinearity
Summary
The function of financial management is basically to take several decisions in the financial sector. These decisions are relevant and have an effect on corporate value. Darmadji and Fakhrudin (2011: 141), explain that corporate value can be measured by Price to Book Value. Http://www.ijetmr.com©International Journal of Engineering Technologies and Management Research [101]. (PBV), a ratio that describes how much the market values the book value of shares of a company. The lowest average Price to Book Value (PBV) for all sectors in the Indonesia Stock Exchange (IDX) from 2008 to 2017 is a sector of miscellaneous industry of 1.00. Among the sub-sectors in the miscellaneous industry sector, the automotive sub-sector and its components have the highest PBV average of 1.56
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