International Journal of Management and Commerce Innovations ISSN 2348-7585 (Online) Vol. 7, Issue 2, pp: (109-121), Month: October 2019 - March 2020, Available at: www.researchpublish.com
The Role of Capital Structure Mediated the Effect of Profitability and Liquidity on Firm Value in 2014-2017 Krisma Deana1, I Putu Yadnya2 1,2 1,2
Udayana University
Faculty of Economics and Bussiness, Bali, Indonesia
Abstract: Firm Value is the investor's perception of the company's success rate that is often associated with stock prices. High stock prices make Firm Value also high, and increase market confidence not only in the company's current performance, but also in the company's future prospects, which can be measured by profitability and liquidity. The purpose of this study was to determine the effect of profitability and liquidity on Firm Value with Capital Structure as a mediating variable in 2014-2017. The study population includes all sea transportation companies listed on the Indonesia Stock Exchange in the 2014-2017 period. The sampling method used is the purposive sampling method, namely the determination of the sample using certain considerations in selecting the sample. The research population data were 41 companies and obtained a sample of 20 companies. Based on the results of the analysis, it was found that profitability had a negative and not significant effect on firm value. Liquidity has a positive and significant effect on firm value. Capital Structure has a negative and significant effect on firm value. Profitability has a negative and not significant effect on capital structure. Liquidity has a positive and significant effect on capital structure. Profitability has an indirect and insignificant influence on Firm Value when mediated by capital structure, liquidity has an indirect and insignificant influence on firm value when mediated by capital structure. Keywords: Profitability, Liquidity, Firm Value, dan Capital Structure.
I. INTRODUCTION The phenomenon that occurs regarding stocks in Indonesia shows that the public interest in the transportation sector is quite high. This is supported by Central Bureau of Statistics data which recorded the transportation and trade sector as the second highest growth sector in the first quarter of 2018, which grew 8.59% compared to the same period last year (Roy, 2018). Regulation of the Minister of Trade No. 82 of 2017 concerning Provisions for the Use of Sea Transportation and National Insurance for the Export and Import of Certain Goods. This regulation requires the export of CPO, coal and rice to use sea transportation controlled by local companies and national insurance. This means that all export and import goods shipping activities which previously used mostly foreign vessels will use domestic vessels, resulting in an increase in the movement of shares in the sea transportation sector (Hidayat, 2018). These conditions make company competition in the business world become increasingly tight. The high intensity of public needs for service companies, especially in the field of transportation, causes the price of transportation shares to continue to increase and means to increase Firm Value. With the Firm Value getting better, the company will be seen as more valuable by potential investors. Firm Value basically can be measured through several aspects, one of which is the market price of the company's shares because the market price of the company's shares reflects the overall investor valuation of each owned equity. The stock market price shows the central valuation of all market participants, the stock market price acts as a barometer of the company's management performance (Gultom, et. al., 2013). According to Arif (2015) Firm Value can reflect the value of assets owned by companies such as securities. There are several factors that affect Firm Value, namely: dividend policy, capital structure, company growth, profitability, liquidity,
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