Vol. 10, No. 1, June 2020, pp. 1-7
ISSN: 2720-9830 1
Effect Of Return On Asset And Return On Equity On Price To Book Value In Automotive Subsector Manufacturing Companies Listed On
The Indonesia Stock Exchange
Ancela Ayusari Bondar Universitas Darma Agung
Article Info ABSTRACT
Article history:
Received month April 2020 Revised month Mei 2020 Accepted month June 2020
The value of the company reflects the value of a company. Where the financial statements will be analyzed with Return On Asset and Return On Equity which is the benchmark to know the amount of the Company's ability to meet short and long-term obligations on the company. Research objects used as samples of automotive companies and listed on the Indonesia Stock Exchange as many as 9 Companies. The results of the ROA hypothetical test study have a t count of 4,092 and a sifnifikan value of 0.000. If the significant value is less than or equal to 0.05 (< 0.05) then the hypothesis is accepted. The results of the study obtained a value of 0.000 <0.05, it can be concluded that roa variables varsially affect the Price to Book Value in automotive sub-sector manufacturing companies listed on the Indonesia Stock Exchange.Variabel ROE has a t count of 8,815 with a significant value of 0.001<0.05. The results of significant tests (f-tests) in accordance with the basis of decision-making in test f can be shown that ROE simultaneously affects PBV. The correlation coefficient (R) value is 0.375 meaning that the relationship of variable X to variable Y in the category is less meaningful. Based on the test results of the naili determination coefficient adjust R Square in the regression model in automotive subsector manufacturing companies obtained by 42,3% PBV influenced by both free variables namely ROA and ROE. While the remaining 57,7% was influenced by other factors outside the model that were not studied in this study.
Keywords:
Price To Book Value Return On Asset Return On Equity
This is an open access article under the CC BY-SA license.
Corresponding Author:
Ancela Ayusari Bondar
Department of Management, Universitas Darma Agung Email: [email protected]
INTRODUCTION
The capital market is a meeting between parties who have excess funds and those who need funds by trading shares. The capital market has a very important role, this is because the capital market functions as a facility or vehicle that brings together two interests, namely those who have excess funds (investors) and those who need funds (issuers) and those who issue securities (issuers).
The decline in ROA value was caused by a decrease in the value of the company's net profit from automotive companies listed on the Indonesia Stock Exchange. If the ROA value increases, it means that the company is able to use its assets productively so that it can generate large profits.
The higher the value of the company, the more prosperous the company is. The higher the value of the company, the more prosperous the owner of the company is. While the use of debt policy can be used to create the desired company value, debt policy also depends on company growth and company size. That is, companies
Jurnal Ilmiah Socio Secretum, Vol. 10, No. 1, June 2020: 1-7
that are large and have good company growth will be relatively easier to access the capital market, companies that have good company growth rates show the company's operational capabilities.
Formulation of the problem
From the background above that has been described, the formulation of the problem in this study is:
Does Return On Assets have a partial effect on Price to Book Value of Automotive Companies Listed on the Indonesia Stock Exchange?
Does Return On Equity partially affect the Price to Book Value of Automotive Companies Listed on the Indonesia Stock Exchange?
Do Return On Assets and Return On Equity have a simultaneous effect on Price to Book Value of Automotive Companies Listed on the Indonesia Stock Exchange?
METHOD
Place and time of research
The research was conducted on the Indonesia Stock Exchange using www.idx.co.id. The author chose to conduct research in this place due to the availability of open data sources and easier data collection processes, this research was conducted from March to August 2021.
Population and Sample
Population is all elements that can be used to make some conclusions. The population in this study are manufacturing companies listed on the Indonesia Stock Exchange during the period from 2017 to 2019 with sampling through purposive sampling technique.
Sampling in this study used a purposive sampling method, which is a sampling technique with certain considerations with the aim of obtaining a sampling unit that has 10 desired characteristics. Considerations for determining the sample in this study are based on the criteria determined by the researcher. The criteria for sampling are as follows:
Automotive sub-sector manufacturing companies listed on the Indonesia Stock Exchange for the 2017-2019 period.
The automotive sub-sector manufacturing company publishes annual reports and notes on complete financial statements for 2017-2019 in a row.
The automotive sub-sector manufacturing companies in this study were taken from the Stock Exchange which did not experience losses but made profits in the 2017-2019 period.
Based on the criteria that meet the requirements above, the research sample that has been carried out is 9 manufacturing companies listed on the Indonesia Stock Exchange in 2017-2019 from 13 manufacturing companies listed on the IDX.
Variable Measurement
The variables in the study as independent variables are:
X1 = ROA (Return On Assets) X2 = ROE (Return On Equity)
While the dependent variable as the dependent variable is:
Y = PBV (Price to Book Value) Data Types and Sources
The data used in this research is secondary data. Secondary data is data that has gone through a processing process first obtained from relevant data sources and can be trusted for its truth. The secondary data in this study was taken from the Indonesia Stock Exchange through the Indonesian Central Securities Depository using the www.idx.co.id page
Method of collecting data
According to Sugiyono (2011:137) "data collection method is the accuracy of the ways used to collect data that can be done in various settings, sources, and various ways". The data collection process is an important part or stage for research.
The data collection techniques needed in this study are as follows:
Method of Library (Library Research)
The library method is collecting data by reading things related to the problems faced. The information is obtained by reading reference books and lecture notes related to research on the effect of capital structure and company size on company performance in manufacturing companies in the automotive sub-sector. This research was conducted by taking written information data.
Field Methods (Field Research) Field methods are methods that are collected using documentation techniques or commonly called secondary data collection. The data from this study were obtained from online media through the Indonesia Stock Exchange website, namely www.idx.com. The data collection technique uses the
documentation method, where information is in the form of various notes in the form of books, journals, theses, photos and other notes related to the work being studied in order to obtain accountable data.
Method of collecting data
Data collection method is a method used to research and collect relevant data or information in the preparation of the thesis. In this study the authors use the method:
Method of Library (Library Research)
Is a research conducted in the library by searching for and collecting the required data through books, literature, economic magazines, lectures and other readings related to this thesis. In other words, this research was conducted by taking data from written data sources.
Field Research Methods (Field Research)
This method is a collection of data by recording data related to the problem to be studied from the documents owned by the company. This study uses documentation techniques through the website www.idx.co.id Methods of Data Analysis and Hypothesis Testing
Descriptive statistics
Descriptive analysis aims to provide an explanation of the variables to be observed. Analysis of the ratios to find the numbers from the X1 (Return on Assets), X2 (Return on Equity) and Y (Price to Book Value) variables, which are used to determine and describe the minimum value, maximum value, mean (average) mean) and the standard deviation (data distribution) of each variable.
Classic assumption test Normality test
According to Ghozali (2011:111) research data is said to be normal if the value of Asymp.Sig (2-tailed) of the residual variable is greater than 0.05. On the other hand, if the value of Asymp.Sig (2-tailed) is less than 0.05, then the data is not normally distributed or does not meet the normality test.
Multicollinearity Test
The multicollinearity test was used to determine the standard error of the model estimation in the study. If the VIF value is <10 and the tolerance value is > 0.10, it can be concluded that there is a multicollinearity problem, and vice versa.
Heteroscedasticity Test
This test proposes to regress the absolute value of the residual on the independent variable. If the residuals have the same variance, it is called homoscedasticity. And if the variance is not the same it is called heteroscedasticity. If the significance value is > 0.05, then there are no symptoms of heteroscedasticity, and if the significance value is <0.05, then there are symptoms of heteroscedasticity.
Autocorrelation Test
The autocorrelation test aims to test whether in the regression model there is a correlation between the error of use in period t and the error of use of period t-1 (previous). A good regression model is a regression that is free from autocorrelation. using Durbin Watson (D-W) statistics (Ghozali, 2011:110). Based on the Durbin Watson test, decision making whether there is autocorrelation is based on the following conditions:
If DW>upper limit (du) then there is no autocorrelation If DW < lower limit (dl) then there is autocorrelation
If dl<DW<du, it cannot be known whether there is a correlation or not Multiple Linear Regression Statistics
Multiple linear regression analysis was used to determine the influence of three or more variables, which included the dependent variable and the independent variable. Multiple linear regression testing uses the following formula:
Y = a + b1X1 + b2X2+e Information :
Y: PBV a: constant
b1,b2: regression direction coefficient
X1,X2: independent variables (ROA and ROE) e: error
Hypothesis testing t test (partial test)
According to Sarwono (2014: 231), the hypothesis testing criteria used are:
The hypothesis is accepted if the value of tcount < ttable or tcount > t table. This means that the independent variable affects the dependent variable.
The hypothesis is rejected if the value of ttable
<tcount < ttable This means that the independent variable has no effect on the dependent variable.
F Test (Simultaneous)
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This test was conducted to determine the effect of all independent variables on the dependent variable simultaneously.
The decision criteria are:
H0 is rejected if F count > F table = 5% H0 is accepted if F count < F table = 5%
Coefficient of Determination Test (R2)
The coefficient of determination is used to identify how much variation of all independent variables can explain the dependent variable. The value of the coefficient of determination (R2) is between 0 to 1. If the value of R2 is close to 1, it means that the independent variable provides almost all the information needed to predict the variation of the dependent variable (Ghozali, 2011:97). On the other hand, if the value of R2 is closer to 0, the smaller the regression model used to explain the dependent variable is.
RESULTS AND DISCUSSION Description of Research Object
A Brief History and Profile of the Indonesia Stock Exchange
Based on historical data, the capital market has existed long before Indonesia's independence. The capital market or stock exchange has existed since the Dutch colonial era and precisely in 1912 in Batavia. At that time the capital market was established by the Dutch East Indies government for the benefit of the colonial government or the VOC. Although the capital market has existed since 1912, the development and growth of the capital market did not go as expected, and even some periods of capital market activity experienced a vacuum. This was caused by several factors, including World War I and II, the transfer of power from the colonial government to the government of the Republic of Indonesia, and various conditions that prevented the operation of the stock exchange from running as it should.
The first stock exchange in Indonesia was established in Batavia on December 14, 1912 by the then ruling government, the Dutch East Indies government. As an initial stage, there were only 13 securities companies that became brokers for investors. However, due to the World War I, in 1914 to 1918, the Stock Exchange in Batavia was closed for a while. Then in 1925, along with the conducive conditions of the Indies government In the Netherlands, the Jakarta Stock Exchange was reopened. Simultaneously with the opening of the Jakarta Stock Exchange, the Semarang and Surabaya Stock Exchanges were also opened. However, in early 1939, the Second World War broke out again, so the Stock Exchanges in Semarang and Surabaya Then in 1942-1952 the Stock Exchange in Jakarta was closed again due to World War II. Then on August 10, 1977 the Stock Exchange began to revive after being inaugurated by President Soeharto. At that time the Jakarta Stock Exchange was run under the Executive Board. Capital Market (BAPEPAM). The re-inauguration of the capital market was also accompanied by a go public/IPO from PT. Semen Cibinong as the first issuer at that time. This is at the same time a path for the development of the new Indonesia Stock Exchange.
In 1977-1987 transactions on the Stock Exchange seemed to have no activity and it can be said that no progress was seen. The number of listed issuers at that time was still 24. Due to the lack of popularity of the stock exchange at that time and the reluctance of companies to register their businesses, many people preferred instruments.
Classic assumption test Normality Test Results
Table 1. of Normality Test Results
Based on the table above the results of data processing, it can be seen that the Asymp value is obtained. Sig.
the data above is 0.067 greater than 0.05 (0.067 > 0.05). So it can be concluded that the data is normally distributed.
Multiple Linear Regression Statistics
Table 2. Multiple Linear Regression Statistics
In the table above, the multiple linear regression test reads the value of column B, the first row shows the constant (a) and the next row shows the constant of the independent variable. Based on the table above, the regression model used is as follows:
Y= 1.267+0.040 X1+1.002 X2
Based on the regression model and the table above, the regression results can be explained as follows:
The constant value (a) of 1.267 is a constant or a state when the PBV variable has been influenced by the ROA variable.
The coefficient value of the ROA variable means that every 1 unit increase in ROA will be followed by an increase in PBV of 0.040. The relationship between Return On Assets and Return On Equity shows a positive relationship.
The ROE variable of 1.002 has a positive effect on PBV.
Hypothesis Testing T test (partial test)
Table 3. Uji t
Based on the coefficients table above, the results of the t test (partial) can be analyzed as follows:
The results of the partial t-test calculations obtained the ROA tcount value of 4.092. The value of tcount > t table or 4.092 > 2.063 with a significant value of 0.000. This shows that the significant value of 0.000 is less than 0.05 or (0.000 <0.05) then ROA has an effect on PBV.
ROE for tcount is 1.377 while ttable is 2.063 so that tcount < ttable 1.377 <2.063. And a significant value of 0.181 indicates that the significant value is greater than 0.05 or (0.181 > 0.05). So ROA has no effect on PBV.
F test (simultaneous) F test results table
Jurnal Ilmiah Socio Secretum, Vol. 10, No. 1, June 2020: 1-7 Table 4. F test results t
The F test is used to jointly test the independent variables affect the dependent variable. Then the results of simultaneous hypothesis testing can be calculated as follows:
The variable ROA, ROE on PBV has a significant value of 0.001 < from 0.005 and F count 8.815 > F table 3.40. This proves that Ho1 is rejected and Ha1 is accepted. So it can be concluded that the ROA, ROE variables have a significant effect on the PBV variable.
Discussion
Effect of Return On Assets (ROA) on Price to book value (PBV)
The ROA variable partially obtained the ROA tcount value of 4.092 with a significant value of 0.000. The value of tcount > ttable is 4.092 > 2.063. This means that ROA has a positive and significant effect on PBV in Automotive companies listed on the IDX in 2017-2019. This condition will increase ROA and increase ROA will increase PBV. This is supported by research conducted by Triagustina (2015) it can be seen that the results of research on the effect of Return On Assets (ROA) partially state that Return on Assets (ROA) has a positive and significant effect on Firm Value (PBV). ROA can provide an analysis of the ratio of net profit per share that the company is able to generate. The higher the ROA value of a company, the higher the profit that can be generated in each share of the company in the capital market. Therefore, if there is a change in the ROA value, it will be followed by an increase in stock prices and vice versa.
Effect of Return On Equity on Price to Book Value (PBV)
The results of the partial t-test calculation obtained the ROE t-value of 1.377 with a significant value of 0.181.
The value of tcount < ttable or 1.377 < 2.063 then H1 is rejected. This means that ROE has a negative and insignificant effect on PBV in Automotive companies listed on the IDX in 2017-1019. Therefore, if there is a change in the ROE value, it will not be followed by an increase in PBV, and vice versa. This is supported by Triagustina's research (2015) which shows that the results of research on the effect of Return On Equity (ROE) partially state that Return on Equity (ROE) has a negative and insignificant effect on Firm Value (PBV).
Return On Assets and Return On Equity Against Price to Book Value (PBV)
Based on the results of the simultaneous parameter test (F-Test) it was obtained that the calculated F value was 8.815 with a significant value of 0.001 < 0.005 while the F table value obtained was 3.40, which means that F arithmetic > F table was 8.815 > 3.40 with a significant level of 0.000 then Ha is accepted. This means that there is a simultaneous influence between the ROA and ROE variables on PBV. This is supported by research conducted by Triagustina (2015) which simultaneously states that Return On Assets (ROA) and Return On Equity (ROE) have a significant effect on firm value (PBV) in automotive sub-sector manufacturing companies listed on the Indonesia Stock Exchange.
CONCLUSION
Based on the results of the research conducted, the conclusions are as follows: Return on Assets has a partial positive effect on PBV in the Automotive sub-sector Manufacturing companies listed on the Indonesia Stock Exchange for the 2017-2019 period. This is because the result of the partial t-test calculation results in the ROA t-count value of 4.092. The tcount > ttable or 4,092 > 2,063 and the sig t test value is more than 0.05 (0.639 > 0.05). So ROA has a direct relationship with the PBV value. Return On Equity has a partial effect on PBV in the Automotive sub-sector Manufacturing companies listed on the Indonesia Stock Exchange for the 2017-2019 period. Therefore, the results of the partial t-test calculation obtained the t-count ROE value of 1.377 with a significant value of 0.559. The value of tcount < ttable or (1,377 < 2,063). Simultaneous significant test (F test) produces a calculated F value of 8.815 with a sig of 0.000, while the F table is 3.40. Because F
count>F table is 8.815 > 3.40 with a significant level of 0.000 < 0.05, the ROA is accepted. This means that there is a simultaneous influence between the ROA and ROE variables on PBV.
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