EFFECT OF COMPANY SIZE, CAPITAL STRUCTURE AND FINANCIAL PERFORMANCE ON THE VALUE OF AUTOMOTIVE AND COMPONENT MANUFACTURING COMPANIES REGISTERED IN IDX FOR THE PERIOD 2017-2019
Ajeng Salsabelia1, Ninik Lukiana2, Kurniawan Yunus Ariyono3
STIE Widya Gama Lumajang Email: salsabeliaajeng@gmail.com1 Email: ibundaninik@gmail.com2 Email: ariyonoary45@gmail.com3
Abstract
This study aims to find out and test the influence of company size, capital structure and financial performance on the value of automotive and component manufacturing companies registered in IDX for the period 2017-2019. This type of research is quantitative research by sampling using purposive sampling method and obtained by 14 companies with 42 data of financial statements of automotive sector manufacturing companies and components registered in IDX period 2017- 2019. The data analysis techniques in this study used multiple linear regression analysis techniques and partial t-tests. The results of this study showed that the size of the company and the capital structure had no effect on the value of automotive and component manufacturing companies registered in IDX for the period 2017-2019, while financial performance had a positive and significant effect on the value of automotive and component manufacturing companies registered in IDX for the period 2017-2019. The R Square value in this study was 19.6% indicating that the contribution of company size, capital structure and financial performance to the company's value was 19.6%, while the remaining 80.4% was influenced by other variables not included in the study such as dividend policy, corporate risk and managerial ownership.
Keyword: company size, capital structure, financial performance and company value
INTRODUCTION
The automotive and component sectors of manufacturing companies provide an important role in supporting indonesia's economy which is characterized by a growing number of world-renowned automotive and component companies opening factories in Indonesia in order to increase their production capacity. As one of the manufacturing sectors that support the country's economy, it is expected that the this can experience significant growth. To support the company's growth and carry out its operational activities, adequate funds are needed by the company. One of the sources of funds that can be used is by using shares. The Company will issue shares for sale to the public or the public through capital market intermediaries. Therefore, companies need to observe changes in their share prices to make investors interested in. The changing share price also affects the value of the company, because the share price is a picture of the value of a company. The value of the company has an important meaning because it is in accordance with the main objective of the company, namely the welfare of its shareholders. With that, the company prospers its shareholders through maintaining or increasing the value of the company. Investors will look at the value of the company to know the growth and performance of the. The high value of a company will have an impact on the level of investor confidence as well as the higher the company.
Company value is the public’s perception or assessment of the company’s financial performance which is shown in the share price created in the capital market through demand and
al. (2013), Ta 'dir et al. (2014), Sari et al. (2016), Prastuti &Sudiartha (2016), Tauke et al.
(2017), Azmy &Vitriyani (2019) and Mudjijah et al. (2019), Nugroho et al. (2019), and Hirdinis (2019) which revealed that the company's size, capital structure and financial performance are some of the factors that affect the company's value.
Company size is a measure used to group the size of a company in various ways, such as through asset totasl, total sales, stock market value and others (Hery, 2017:3).. The size of the company has a significant influence on the value of the company supported by research conducted by Rizqia et al. (2013) and Nugroho et al. (2019) stated that there is an influence of the size of the company on the value of the company. Investors will choose large companies when compared to small companies because it is considered more stable. The increasing purchase of shares in the capital market will have an impact on the increased share price and also followed by the increasing value of a company. However, this statement is inversely proportional to research conducted by Dahar et al. (2019), Mudjijah et al. (2019) and Pratiwi (2020) which revealed that the size of the company has no relationship with the value of the company.
Capital structure is a thing that shows the picture of the company's financial balance between the capital owned from long-term debt and its own capital that becomes the source of financing for the company's activities (Fahmi, 2015:179). The capital structure has a significant influence on the value of the company supported by research conducted by Prastuti & Sudiartha (2016) and Hirdinis (2019) stated that there is an influence of capital structure on the value of the company. High levels of debt and corporate risk levels can lead to the company's goal of profitability. This will result in a decrease in the share price in the capital market and will also have an impact on the decline in the value of a company. However, this statement is inversely proportional to research conducted by Irawan & Nurhadi (2016), Nugroho et al.
(2019) and Pramesti et al. (2019) which revealed that the capital structure has no relationship with the value of the company.
Financial performance is an analysis used to show whether the company has implemented the rules of financial implementation properly and correctly (Fahmi, 2015:179). Financial performance has a significant influence on the value of the company supported by research conducted by Sari et al.
(2016) and Azmy &Vitriyani (2019) stated that there is an influence of financial performance on the value of the company. Financial performance can reflect the level of stability of the company as well as the company's ability to manage and utilize existing resources as achievements obtained by the company in a certain period, so that it can be known the value of the company. However, this statement is inversely proportional to research conducted by Sondakh et al. (2019) and Aini &
Cholid (2020) which revealed that financial performance has no relation to the value of the company.
Based on the above background, this study aims to find out and test the influence of company size, capital structure and financial performance significantly on the value of the company.
METHODS
this study are company size (Size) (X1), capital structure (DER) (X2), and financial performance (ROA) (X3) and bound variables in this study namely company value (PBV) (Y).
The following is a multiple linear regression equation:
PBV = a + b₁Size + b₂DER + b₃ROA
The first test conducted is a classic assumption test consisting of several stages including data normality test, multicolinearity test, heterokedastisity test and autocorrelation test. Hypothetical testing methods include t (partial) test, F test (model feasibility test) and coefficient of determination (R²) analysis.
RESULTS AND DISCUSSION
Classic Assumption Test
The results of the normality test show that the data is normally distributed, this is evidenced by the Jarque-Bera test which produces a value below its critical chi-square value. In addition, the free variables used in the study did not show or were free from the symptoms of multicolinearity, because all free variables showed VIF values below 10 and tolerance values above 0.1.
Heterokedastisity tests also showed that there were no symptoms of heterokedastisity in the regression model in the study shown with scatterplots graphs that did not show a specific pattern and the dots spread randomly. In addition, the study also showed no autocorrelation symptoms with Durbin-Watson values of 0.837. So this study meets the criteria for further research using multiple linear regression analysis.
Multiple Linear Regression Analysis
Table 1. Multiple Linear Regressions Type
Unstandardized Coefficients
Standardized Coefficients
b Std. Error Beta t Sig. Information
(Constant) 2,039 2,875 ,709 ,483
Size -,032 ,098 -,051 -,323 ,749 No effect
Der -,044 ,157 -,046 -,280 ,781 No effect
Roa 3,380 1,332 ,405 2,538 ,015 Influence with
positive direction R = .442
R Square = .196
Adjusted R Square = .132
Std. Error of the Estimate = .978551 Sig F = .039
Source: Data processing results, 2021.
Based on multiple linear regression calculations, the following result is obtained:
PBV = 2.039 - 0.032Size - 0.044DER + 3.380ROA From the equation above can be explained as follows:
1. In the equation of the coefficient above, the constant value of 2.039 indicates that the company value (PBV) is 2,039 if the free variable is equal to 0.
Hypothesis Test Results t test (partial)
Based on the test results above can be concluded about the first hypothesis to the third hypothesis described as follows:
1. For company size variables measured by Size returns a tcalculated of (-0.323) < t table (-2.02439) and a sig of 0.749 > α 0.05 thus indicating that H₁ rejected which means that the company size has no effect on the company's value.
2. For variable capital structures as measured by debt to equity ratio (DER) returns a tcalculated of (- 0.280) < t table (-2.02439) and sig 0.781 > α 0.05 thus indicating that H₂ rejected which means that the capital structure has no effect on the value of the company.
3. For financial performance variables as measured by Return on Assets (ROA) returns a tcalculated of 2,538 > t table 2.02439 and sig 0.015 < α 0.05 thus indicating that H₃ received which means that financial performance positively and significantly affects the company's value.
F Test (Model Feasibility Test)
Feasibility test model or F test is conducted to find out if the model analyzed has or has a high level of model feasibility that means all independent variables (free) namely the size of the company (Size), capital structure (Debt to Equity Ratio) and financial performance (Return on Assets) used in the model is able to explain or predict dependent variables (bound) ie the value of the company (Price to Book Value) analyzed in the study. Based on test F in table 1 obtained the result of Fcalculates of 3,081 with significance of 0.039. By using the significance limit of 5% or 0.05, Ftable is obtained by 2.85. This means that Fcalculates 3,081 > Ftable 2.85, so it can be concluded that all independent variables contained in the model can be used to predict dependent variables. It means that all independent variables namely the size of the company (Size), capital structure (Debt to Equity Ratio) and financial performance (Return on Assets) are worth to be used in explaining dependent variables in research is the value of the company (Price to Book Value).
Results of Determination Coefficient (R²)
The coefficient of determination (R²) is used to calculate the model's ability to describe variations in the influence of free variables on bound variables. From table 1 it can be known that the value of the coefficient of determination indicated through the Value of Adjusted R Square is 0.196. This indicates that 19.6% of the dependent variable namely company value can be explained by three independent variables namely the size of the company, the capital structure and financial performance. While the remaining 80.4% is explained by other variables not studied in this study such as dividend policy, corporate risk, financial leverage, investment opportunity and managerial ownership.
Discussion
Discussion of The First Hypothesis Test
This discussion concerns the test results above against the first hypothesis that states the size of the company affects the value of automotive and component manufacturing companies registered in IDX for the period 2017-2019. However, the results of the data obtained by the company size research have no effect on the value of automotive and component manufacturing companies registered in IDX for the period 2017-2019.
The reason that the size of the company has no effect on the value of the company in this study is because investors in investing their shares will choose a company with good prospects for the future. Companies with a size of any size if they are experiencing losses and heading for bankruptcy then investors will not directly invest in the company. Investors pay more attention to other factors such as capital structure and financial performance that are considered to further affect the return on investments that have been made. Company with a large size will maximize the ability of its management in managing the company to increase the value of the company. In companies with smaller sizes despite having investments that are not too large but can provide a large profit. Companies with large total assets are not necessarily able to provide a large profit, this can be because the assets owned more are in receivables and inventory. The profit generated by the company will be maintained rather than distributed as dividends, this can affect the share price which will also affect the value of the company.
Discussion of The Second Hypothesis Test
This discussion concerns the results of the above tests on the second hypothesis that states the capital structure has an effect on the value of automotive and component manufacturing companies registered in IDX for the period 2017-2019. However, the results of the data obtained from the capital structure research have no effect on the value of automotive and component manufacturing companies registered in IDX for the period 2017-2019.
The reason that the capital structure does not affect the value of the company in this study is because the value of the company can be influenced by many other factors. Such as financial performance and liquidity are considered better to be used as a benchmark in assessing a company. This result shows the unproven theory of capital structure that states that the higher the level of debt use, the higher the value of the company. The large total debt has no effect on the company's declining share price, as investors see how effectively the company uses debt to provide added value for the company. In addition, the different investor's point of view towards a company is also one of the factors that cause the capital structure has no effect on the value of the company. Companies with increased debt each year will not be able to increase the value of their companies either. The Company has a great responsibility to the creditor to fulfill all its obligations because in the payment of debts to creditors will be followed along with interest payments. This will be taken as a negative signal for investors because the interest expense incurred by the debt will reduce the company's profit. However, the company is also confident that it will benefit more in the future with a high capital structure derived from external sources of debt. Large profits that can exceed the interest expense incurred by debt can be obtained if the company is able to manage its loans well. This will be captured by investors as one of the positive signals.
Discussion of The Third Hypothesis Test
This discussion concerns the results of the above tests on the third hypothesis that states that financial performance has an effect on the value of automotive and component manufacturing companies registered in IDX for the period 2017-2019. However, from the results of the data obtained the results of financial performance research positively and significantly affect the value of automotive and component manufacturing companies registered in IDX period 2017-2019.
The reason that causes financial performance to have a positive and significant effect on the value of the company in this study is because the ability of the company in generating profits will affect the value of the company. If the company is able to generate a large amount of profit and always increase it will increase the value of the company. However, if the profit generated by the company decreases, it will be followed by a decrease in the value of the company. Each company will do its utmost to obtain a high level of profit to prosper its owners and shareholders which will impact the value of the company. The greater level of profit will increase investor confidence that the management of the company has a good ability in managing the company's total assets effectively and efficiently to generate profit for the company. Investors will make this a positive signal from the company due to the increase in the level of profit or profit, so it will encourage investors to invest in the company. The impact of this is the increased share price and followed by an increase in the value of the company.
Perusahaan Manufaktur yang Terdaftar di Bursa Efek Indonesia. Parameter, 4(1), 1287–
1293. https://doi.org/10.37751/parameter.v4i1.31
Azmy, A., & Vitriyani, V. (2019). Pengaruh Rasio Kinerja Keuangan Terhadap Nilai Perusahaan BUMN Non-Keuangan di Bursa Efek Indonesia. Fokus Bisnis : Media Pengkajian Manajemen dan Akuntansi, 18(2), 1–10. https://doi.org/10.32639/fokusbisnis.v18i2.322 Dahar, R., Yanti, N. S. P., & Rahmi, F. (2019). Pengaruh Struktur Modal, Ukuran Perusahaan dan
Return On Equity Terhadap Nilai Perusahaan Property and Real Estate yang Terdaftar di Bursa Efek Indonesia. Jurnal Ekonomi & Bisnis Dharma Andalas, 21(1), 121–132.
Fahmi, I. (2015). Analisis Laporan Keuangan. Bandung: Alfabeta.
Harmono. (2014). Manajemen Keuangan Berbasis Balanced Scorecard (Pendekatan Teori, Kasus dan, Riset Bisnis). Jakarta: Bumi Aksara.
Hery. (2017). Kajian Riset Akuntansi. Jakarta: Grasindo.
Hirdinis, M. (2019). Capital Structure and Firm Size on Firm Value Moderated by Profitability.
International Journal of Economics and Business Administration, 7(1), 174–191.
https://doi.org/10.35808/ijeba/204
Irawan, D., & Nurhadi, K. (2016). Pengaruh Struktur Modal, dan Ukuran Perusahaan Terhadap Nilai Perusahaan. Jurnal Aktual STIE Trisna Negara, 4(2), 358–372.
Mudjijah, S., Khalid, Z., & Astuti, D. A. S. (2019). Pengaruh Kinerja Keuangan dan Struktur Modal Terhadap Nilai Perusahaan yang Dimoderasi Variabel Ukuran Perusahaan. Jurnal Akuntansi Dan Keuangan, 8(1), 41–56.
Nugroho, P. S., Sumiyanti, T., Astuti, P., Akuntansi, S., & Totalwin, S. (2019). Analisis Faktor- Faktor Yang Mempengaruhi Manufaktur Yang Terdaftar di BEI Tahun 2014 - 2018.
November, 129–135.
Pramesti, A. T., Irdiana, S., & Lukiana, N. (2019). Pengaruh Kinerja Keuangan Terhadap Nilai Perusahaan (Studi pada Perusahaan Manufaktur Subsektor Makanan dan Minuman di Bursa Efek Indonesia). Jobman: Journal of Organization and Business Management, 2(2), 95–
100.
Pratiwi, R. D. (2020). Do Capital Structure, Profitability, and Firm Size Affect Firm Value? Jurnal Penelitan Ekonomi Dan Bisnis, 5(2), 194–202.
https://doi.org/10.33633/jpeb.v5i2.3717
Rai Prastuti, N., & Merta Sudiartha, I. (2016). Pengaruh Struktur Modal, Kebijakan Dividen, dan Ukuran Perusahaan Terhadap Nilai Perusahaan Pada Perusahaan Manufaktur. None, 5(3), 254202.
Rizqia, D. A., Aisjah, S., Program, P., & Java, E. (2013). Effect of Managerial Ownership , Financial Leverage, Profitability , Firm Size , and Investment Opportunity on Dividend Policy and Firm Value. 4(11), 120–130.
Sari, D. M., Gustini, E., & Tripermata, L. (2016). Pengaruh Struktur Modal dan Kinerja Keuangan Perbankan di Bursa Efek Indonesia. Jurnal Ilmiah Ekonomi Global Masa Kini, 7(03), 33–
39.
Sondakh, P., Saerang, I., & Reitty Samadi. (2019). Pengaruh Struktur Modal (ROA, ROE dan DER) Terhadap Nilai Perusahaan (PBV) Pada Perusahaan Sektor Properti yang Terdaftar di BEI (Periode 2013-2016). Jurnal EMBA: Jurnal Riset Ekonomi, Manajemen, Bisnis Dan Akuntansi, 7(3), 3079–3088. https://doi.org/10.35794/emba.v7i3.24196
Ta ’dir, O. :, Prasetia, E., Tommy, P., Saerang, I. S., Ekonomi, F., Bisnis, D., Manajemen, J., Sam, U., & Manado, R. (2014). Struktur Modal, Ukuran Perusahaan dan Risiko Perusahaan Terhadap Nilai Perusahaan Otomotif yang Terdaftar di BEI. Ukuran… Jurnal EMBA, 8792(2), 879–889.
Tauke, P. Y., Murni, S., & Tulung, J. E. (2017). Pengaruh Kinerja Keuangan Terhadap Nilai Perusahaan Real Estate and Property yang Terdaftar di Bursa Efek Indonesia Tahun 2012- 2015. Jurnal EMBA, 5(2), 919–927.
