Abstract
Market confidence in a company is determined by the size of the company's value. This trust is not only in the current financial performance but includes the company's prospects in the future. Reilly & Brown (2011) said that among the methods that can be used to determine firm value is by comparing stock prices to relevant variables that affect the stock value such as price to book value (PBV). The price to book value (PBV) is the comparison between the market price per share and the book value per share or the comparison between the market value (market price) and its book value (original value). Based on previous research, there are several factors that can affect firm value, including: funding decisions, dividend policy, investment decisions, CSR, company growth, and company size. Some of these factors have an inconsistent relationship and influence on firm value. This study aims to determine the effect of DER and CR on ROE and PBV in the Food and Beverages industry sub-sector companies listed on the Indonesia Stock Exchange for the period 2014-2019. The company that became the population in this study were 32 with a sample of 12 companies determined by purposive sampling method. Research data processing and hypothesis testing using path analysis techniques with SPSS version 22 application tools. The results of this study indicate that, simultaneously or partially DER and CR have a positive and significant effect on ROE, DER and CR simultaneously have a negative and significant effect on PBV, but partially DER and CR have a negative and insignificant effect on PBV. ROE has a positive and significant effect on PBV, and ROE is proven to be an intervening variable or a mediating variable for the effect of DER and CR on PBV.
Highlights
The Indonesia Stock Exchange (IDX) or the Indonesia Stock Exchange (IDX) is a stock exchange market owned by Indonesia as a result of the merger of two stock exchanges, namely the Jakarta Stock Exchange (JSX) and the Surabaya Stock Exchange (BES)
Based on the results of the research that has been stated in the previous chapter, it can be concluded that the essence of the entire study will be stated in the form of a description of the conclusions as follows: 1. Based on the results of the research and discussion that have been carried out, it is found that there is a positive and significant relationship or relationship either partially or simultaneously between the debt to equity ratio (DER) variable and the current ratio (CR) variable to the return on equity (ROE) variable
The results of this study have been able to prove the proposed hypothesis, namely the debt to equity ratio (DER) variable and the current ratio (CR) variable simultaneously have a significant effect on price to book value (PBV) which is acceptable
Summary
The Indonesia Stock Exchange (IDX) or the Indonesia Stock Exchange (IDX) is a stock exchange market owned by Indonesia as a result of the merger of two stock exchanges, namely the Jakarta Stock Exchange (JSX) and the Surabaya Stock Exchange (BES) The merger of these two stock exchanges aims to serve as a stock and bond market (a market for trading securities issued by the government or companies with a certain period of time) and a derivatives market (bilateral contracts or trading contracts used as investment instruments). This stock market has been operating since December 1, 2007 under the name Indonesia Stock Exchange (IDX). The following is a graph of the number of companies listed on the IDX from 2014-2019: JEFMS, Volume 5 Issue 03 March 2022 www.ijefm.co.in
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