The value of Company

Berdasarkan uraian yang telah dipaparkan di atas, maka menarik untuk dilakukan penelitian pada perusahaan yang masuk dalam indeks saham LQ-45 periode tahun 2007-2011 dengan mengangkat [r]

The company is a place where a bunch of people to work or run a business in order to achieve a particular goal. The company is one of the economists who have an extremely important role against the viability of the economy and society in the face of this current era of globalization. Progress in the field of information and technology as well as the existence of openness pasarmenjadikan companies should pay attention to in a serious and open about the impact of the behaviour of the company itself to the environment and stakeholders ( Nugroho, 2016). The most fundamental interest in running the company's activity is gaining profit or gain the most profit to prosperity for shareholders. The increase in the value of the company is high is a long-term goal that should be achieved in the company,

Abstract: The purpose of this study was to determine the effect of dividend policy, debt policy, profitability, and investment decisions in part on the value of the company.The data used secondary data, with a population of basic chemical industry research company went public listed on the Indonesia Stock Exchange 2012-2016 period. The sampling technique is purposive sampling of 65 companies acquired 12 companies basic chemical industry for five years. Results from this study thatdividend policy (payout ratio) does not affect the value of the company (price to book value) .kebijakan debt (debt to equity ratio) has no effect on the value of the company (price to book value). Profitability (return on equity) effect on firm value (price to book value). investment decisions (price earnings ratio) effect on firm value (price to book value) Adjusted R2 of 0.399, which means that the value of the company was affected by the dividend policy, debt policy, profitability, and investment decisions. While the remaining 60.1% (0.601) is influenced by other factors outside the research.

Application of different inventory accounting methods would affect the financial statements, which will be responded by investors, thus affecting the market value of the company. This study is a replication of two previous studies Anisa (2004) and Wiryadi and Supatmi (2008) which have different results. This study wanted to retest the effect of the method of accounting for inventories on the company's market value. The hypothesis of this study is the method of average inventory accounting in the financial statements has more influence on the market value of the company compared to the FIFO accounting method. Hypothesis test is done using the test nonnested The discrimination approach and the discerning approach. The population in this study is the companies listed in the Stock Exchange in 2007 to 2009. The results of the 2 methods of testing hypotheses in this study showed different results. In testing using the discrimination approach of inventory accounting method more reflect the average market value than the FIFO method of inventory accounting. In contrast to the approach discerninig testing using the FIFO method of inventory accounting better reflect the company's market value. With the weakness in discrimination approach method of which models a simple ranking is only based on a model selection criterion and provide the highest value of election measures of goodness of fit, then the conclusions of this study using discerninig approach methods. So in this study proves that the FIFO method of inventory accounting in the financial statements more influence on the market value of the company compared with the method of average inventory accounting.

Equality and fairness defined as fair and equal treatment in fulfilling the right of stakeholder arising under treaties and laws, which have applied. Fairness also includes to fulfill the right of investors, legal system and enforcement of regulations, which protect investors. Fairness is expected to make the entire of company ’ s assets are well managed and prudent, also expect to protect all members. Corporate should provide the opportunity for stakeholders to provide input and expression to the interests of companies and open access to information in accordance with the principle of transparency in their respective positions.

The purpose of this study to determine whether there are differences in stock returns based on the performance of EVA, MVA, dan MBR. EVA and MVA measures the value added produced by the company by way of reducing the burden of capital costs incurred as a result of investment made. MBR can be used to judge the company by looking at the market price per share compared to the book value of the company. Stock return is an investor gains on stock investment. The sample in this study is a telecommunications comany that go public in 2005- 2010. Data used secondary data from financial information company. Hypothesis testing is done by the statistical method with different test (t-test) and the chi- square test with SPSS. The results showed that there was no difference in stock returns based on the performance of EVA, MVA, and MBR.

Based on the picture above, it turns out the shift in value and value creation affect the earnings. When viewed partially, the shift of negative value significantly (sig.level 0.00 <0.05) to profit, that is equal to −0.22, whereas value creation has a positive effect on profit of 0.35, this indicates that profits will increase if the company is able to do to value creation and able to anticipate shifting values. The results of this study support the previous theory of (Cabiddu et al., 2013), states, value creation is how can a company efficiently creates more promising new value offering? According to (Grönroos & Voima, 2013), customer values creation focuses on the customer (customer focus), its core competence in the business domain, and its collaborative network on business partners. This means that a company can create customer value if it is able to always focus on customers, have core competencies, and have business partners with its collaboration network, so as to be able to have superior positional and superior organizational performance, and ultimately increase the company’s profit.

Principally, the sustainable and capability of the company based on IC, so the company’s resources can create value added. Edvinson and Malone (1997) in Ulum (2008) state the function of IC is a tool to determine company value and it is also supported by Abidin (2000) that market value occur since the entry of IC concept becomes the main factor to develop company value. Optimizing the company value is the goal of companies which can be seen by the company share price and the difference between share price with book value of asset that show the company hidden value. The bigger of intellectual capital (VAIC TM ), the more efficient of company capital utilization, so that will give value added contribution for the company. Further, the intellectual capital may also increase the competitive advantages and contribute to the company performance, so that the intellectual capital has impact to the company value and the financial performance improvement (Abdolmohammadi, 2005).

Throughout this chapter, it contains about the background of study, the problem statement, includes the objectives to be achieved throughout the project and the scope of the study. The limitation of the product study is also included in this chapter. Throughout this chapter, it provides a structure of the report which generally describes about chapter division and related contents to that particular chapter. In overall, it summarizes the progress of the whole project, describing how the whole project has been done.

Maximizing company value is very important it also means maximize shareholders wealth as main objective of firm. Firm value is reflected in stock prices that steady and increase. High stock price makes firm high valued and affect on market confidence toward current firm performance and outlook for future firm. Firm value becomes something very important in investment decision (Putu et al : 2014). Price Ernings Ratio (PER), Price to Book Value Ratio (PBV), Tobin’s Q and Price sales ratio are some of the widely used ratios to determine the value of a company (Purwanto and Agustin : 2017). In this reasearch used PBV as proxied of Company Value. According to Husnan and Pujiastuti (2006), Price to Book

Additional paid in capital ....................................................... 180,000 To adjust accounts to market value as part of fresh start accounting. Since the company has a reorganization value of P760,000 but the assets have a market value of only P700,000 (P90,000 + P210,000 + P400,000), and account entitled Reorganization Value in Excess of Amount Allocable to Tangible Assets must be recorded for P60,000.

of MCS, size is proposed as a driver in all cases 8 (Flamholtz & Randle, 2000; Greiner, 1972, 1998; Simons, 2000, p. 310). In the early stages of a company, control and coordination happens through frequent and informal interactions. As the company grows, its attention shifts to developing systems that anchor informal interactions around a set of formalized systems. The relevance of size is linked to the increasing costs of governance asso- ciated with an informal approach to management. Informal management requires direct contact among employees; but as the number of people increases, the number of possible interactions among organizational members increases much faster. 9 If these interactions drive coordination and control costs, then the efficiency of an infor- mal management rapidly decreases with size (Bhide, 1999, Chap. 10). Because communication and control happen through direct contact, orga- nizational members need to allocate an increasing amount of time to maintaining an increasing number of interactions. This time is divested from potentially more value-added activities. To regain efficiency in managing the organization, coordi- nation and control mechanisms are formalized with the objective of coding and documenting organizational learning (Ditillo, forthcoming; Le- vitt & March, 1988) and reducing the demand that routine activities impose on the management team’s time. Size may also reflect increasing com- plexity not only through the interaction among participants and the need for differentiation and integration (Lawrence & Lorsch, 1967), but also through the complexity associated with new mar- kets and new products (Mintzberg, 1979). These arguments suggest a positive association between size and the adoption of MCS.

Unlike the financial perspective, your customer perspective metrics may not shift over time since most companies have stable value propositions. These value propositions tend to fall into five areas: Quality, Price, Timeliness, Functionality, Brand Image and Customer Relationships. Take for example WalMart which delivers low prices. Measuring and monitoring competitive pricing becomes extremely important. If you are selling luxury cars, your emphasis is on measuring quality. If you are Federal Express, the emphasis is on timely delivery. These value propositions represent core competencies – things the company is exceptionally good at in the eyes of the customer.

Deferred compensation is pay that was earned on current performance but is paid later to the employee. The compensation may include profit sharing plans, pensions, and stock-based plans like ESOPs. The payment by the employer can be deducted currently for tax purposes but the employee doesn't recognize it as income until it is received. In stock option plans, earnings in the plan are not taxable to the employee until the plan is distributed. Size of the plans are affected by the firm's stock value and encourage employees to take a more positive attitude about the company's future.

Research conducted by Rahim et al., (2010) examined the impact of investment governance and board governance on company valuation. Results from these studies show that investment is positively related to the value of the company, board governance, profitability is negatively related to the value of the company, leavrage, dividends, free cash flow was positively related to the value of the company. Overall this study suggest that the value of the company will be increased through a reduction in agency costs through the monitoring mechanism, debt agreements and implement investment strategies that secure (by avoiding risky investment) as well as ensuring that excess cash is distributed to holders of saham. This research shows that return have a negative effect and significant investment. H4: Islamic etical retun affect the value of the company through investment based on the principles of sharia.

On March 8, 2005, the Company also entered into a hedging transaction using the Cross Currency Interest Rate Swap (CCIRS) instrument with Standard Chartered Bank, Jakarta Branch (Standard Chartered) for the same period with the HC Finance B.V. loan (see Note 11), which is 4 years. Under the CCIRS, the Company will purchase U.S. dollars with a notional amount of US$150 million from Standard Chartered at the maturity date on March 8, 2009 with a fixed exchange rate of Rp9,358 to US$1. Also, Standard Chartered will pay the Company quarterly interest at the rate of 3 Months’ LIBOR + 1.80% per annum. At the same time, the Company will pay interest to the Standard Chartered at the rate of 3 Months’ Sertifikat Bank Indonesia (SBI) + 1.99% per annum on the above-mentioned notional amount using the above exchange rate. As of June 30, 2005, the Company recognized the net receivables on the CCIRS contract at market value of Rp14,209,545,933, which is presented as part of “Other Receivables from Third Parties” in the 2005 consolidated balance sheet.

As of June 30, 2007, the Company has a Cross Currency Interest Rate Swap (CCIRS) transaction with Standard Chartered Bank, Jakarta Branch (SCB) to hedge its US$150 million debt to HC Finance B.V. Under the CCIRS, the Company will purchase U.S. dollars with a notional amount of US$150 million from SCB on March 8, 2009 (maturity date) fo r a fixed exchange rate of Rp9,358 to US$1. Also, SCB will pay the Company quarterly interest in U.S. dollars computed at the rate of 3 Months’ LIBOR + 1.80% per annum in exchange for the Company paying quarterly interest to the SCB in rupiah computed at the rate of 3 Months’ Sertifikat Bank Indonesia (SBI) + 1.99% per annum on the above-mentioned notional amount using the above exchange rate. The above interest payment period is the same with the interest payment period of the HC Finance B.V. loan. Based on an amendmen t to the CCIRS dated August 10, 2006, effective July 20, 2006, the quarterly interest to be paid by SCB to the Company will be at the rate of 3 Months’ LIBOR + 1.15% per annum , while the interest to be paid by the Company to SCB will be at the rate of 3 Months’ SBI + 1.33% per annum. As of June 30, 2007 and 2006, the Company recognized the net liabilities on the CCIRS contract at fair value of R p65,588,479,776 and Rp46,687,776,300, respectively, which are presented as “Long-term Derivative Liabilities” consolidated balance sheet.

The Company has entered into a Cross Currency Interest Rate Swap (CCIRS) transaction with Standard Chartered Bank, Jakarta Branch (SCB) to hedge its US$150 million debt to HC Finance B.V. Under the CCIRS, the Company will purchase U.S. dollars with a notional amount of US$150 million from SCB on March 8, 2009 (maturity date) for a fixed exchange rate of Rp9,358 to US$1. Also, SCB will pay the Company quarterly interest in U.S. dollars computed at the rate of 3 Months’ LIBOR + 1.80% per annum in exchange for the Company paying quarterly interest to the SCB in rupiah computed at the rate of 3 Months’ Sertifikat Bank Indonesia (SBI) + 1.99% per annum on the above-mentioned notional amount using the above exchange rate. The above interest payment period is the same with the interest payment period of the HC Finance B.V. loan. Based on an amendment to the CCIRS dated August 10, 2006, effective July 20, 2006, the quarterly interest to be paid by SCB to the Company will be at the rate of 3 Months’ LIBOR + 1.15% per annum, while the interest to be paid by the Company to SCB will be at the rate of 3 Months’ SBI + 1.33% per annum. As of December 31, 2006, the Company recognized the net liabilities on the CCIRS contract at fair value of Rp75,939,001,160, which is presented as “Long-term Derivative Liabilities” in the 2006 consolidated balance sheet. As of December 31, 2005, the Company recognized the net assets on the CCIRS contract at fair value of Rp84,171,508,110, which is presented as “Long-term Derivative Assets” in the 2005 consolidated balance sheet.

Based on the minutes of the extraordinary general meeting of the Company’s shareholders (EGMS) held on October 2, 1989, which were covered by notarial deed No. 4 of Amrul Partomuan Pohan, S.H., LLM., the shareholders approved, among others, the offering of 598,881,000 shares to the public. Based on the minutes of the EGMS held on March 18, 1991, which were covered by notarial deed No. 53 of the same notary, the shareholders approved the issuance of convertible bonds with a total nominal value of US$75 million. On June 20, 1991, in accordance with the above-mentioned shareholders’ approval, the Company issued and listed US$75 million worth of 6.75% Euro Convertible Bonds (the “Euro Bonds”) on the Luxembourg Stock Exchange at 100% issue price, with an original maturity in 2001. The Euro Bonds were convertible into common shares starting August 1, 1991 up to May 20, 2001 at the option of the bondholders at the initial conversion price of Rp14,450 per share, with a fixed rate of exchange upon conversion of US$1 to Rp1,946.

We found there are a mismatch results in several studies described before, some studies state that institutional ownership has a positive relationship to the value of the company, while others stated that institutional ownership has a negative effect on the value of the company and there are also found that institutional ownership has no significant effect on the value of the company. So that further research is necessary to provide empirical evidence about the effect of institutional ownership on company’s value. The title of this research is, “ The Effect of Institutional Ownership On Value of The Company Study Of Manufacturing Company Listed in Indonesia Stock Exchange Year 2010-2014 ”.