PENGARUH RASIO KEUANGAN DAN GOOD CORPORATE GOVERNANCE TERHADAP NILAI PERUSAHAAN

Abstract

Firm value is a way to maximize companies’ objectives by increasing stakeholders’ wealth as its stock price increases. Therefore, this research aimed to examine the effect of financial ratios and Good Corporate Governance on firm value. The data collection technique used purposive sampling. In line with that, there were 22 samples with 52 observations. The result concluded that the current ratio had an insignificant effect on firm value. It showed how much the idle fund was. This reflected the management did not use their assets efficiently. However, the DER had a positive effect on firm value. It meant the investors would choose a higher value since it showed how small the companies’ financial risk was. In contrast, ROA had an insignificant effect on firm value. In other words, a higher ROA was not relevant information for investors to decide their investment decisions. On the contrary, managerial ownership had a positive effect on firm value. This affected the companies in running the business and in the end, influenced their performance.