Company Size and Audit Quality

Oct 13, 2025 by windailys.com 89 views

Factors that Influence the Company's Value in Manufacturing Companies Listed on the Indonesia Stock Exchange with Profitability as Intervening Variables

The manufacturing industry plays a vital role in the economic growth of a country, and the Indonesia Stock Exchange (IDX) is one of the largest stock exchanges in Southeast Asia. The value of a company is a crucial factor in determining its success and competitiveness in the market. However, the factors that influence a company's value are complex and multifaceted. This study aims to understand and analyze various factors that affect the company's value in the manufacturing industry listed on the IDX with a focus on profitability as an intervening variable.

Research Methods

In this study, the analysis was carried out using statistical tools such as multiple regression analysis and path analysis, with the help of SPSS software version 20.0. The data used consists of financial statements and other relevant information from companies listed on the IDX. The use of purposive sampling method ensures that only companies that meet certain criteria included in the analysis, so that the results obtained are more accurate and relevant.

Analysis Results

The results showed that simultaneously, variables such as leverage, asset structure, company size, liquidity, growth, and audit quality have a significant influence on company value. However, when viewed partially:

Leverage and Liquidity: Both of these variables have an insignificant negative effect on the company's value. This shows that an increase in poor debt or cash management does not always harm the company's value directly.
Asset Structure: This variable has a negative and significant effect, which shows that the composition of company assets has a major effect on market assessment. Assets that are not productive or not in accordance with market needs can reduce the value of the company.
Company Size and Audit Quality: Both of these factors have a positive and significant effect on company value. Larger companies tend to have better access to capital and resources, while good audit quality provides more confidence to investors.
Company Growth: This variable shows a positive but insignificant effect, which can be interpreted that although good growth is expected to increase the company's value, the reality is not always realized.

The Role of Profitability as an Intervening Variable

In this study, profitability is proven to be a significant intervening variable in the relationship between liquidity and company value. This shows that good management of liquidity not only improves financial conditions, but can also increase profitability which ultimately has a positive impact on the company's value. However, profitability does not indicate a significant effect of intervening in the relationship of company size, growth, and audit quality on company value. In addition, profitability cannot act as an intervening variable in the leverage and asset structure of the company's value, which indicates that although profitability is important, these factors require special attention in the company's strategy.

Conclusion

This study provides valuable insight for manufacturing company management listed on the IDX in an effort to increase company value. By understanding the influential factors, companies can make better decisions in terms of financial management, growth strategies, and improve audit quality. This not only increases the competitiveness of the company in the market, but also increases investor confidence which ultimately has a positive impact on the company's overall value.

Implications for Practice

The findings of this study have several implications for practice:

Financial Management: Companies should focus on managing their financial resources effectively, including managing debt and cash flow.
Growth Strategies: Companies should develop strategies to improve their growth prospects, including investing in research and development and expanding into new markets.
Audit Quality: Companies should prioritize audit quality to increase investor confidence and improve their financial reporting.
Profitability: Companies should focus on improving their profitability by managing their costs and increasing their revenue.

Limitations of the Study

This study has several limitations:

Sample Size: The sample size of 56 companies may not be representative of the entire manufacturing industry listed on the IDX.
Data Quality: The quality of the data used in this study may be affected by the accuracy and completeness of the financial statements and other relevant information.
Methodology: The use of multiple regression analysis and path analysis may not capture the complexity of the relationships between the variables.

Future Research Directions

This study provides several avenues for future research:

Investigating the Impact of Other Factors: Future studies can investigate the impact of other factors, such as market conditions and industry trends, on company value.
Developing a More Comprehensive Model: Future studies can develop a more comprehensive model that includes additional variables and relationships.
Investigating the Impact of Profitability on Company Value: Future studies can investigate the impact of profitability on company value in more detail, including the mechanisms through which profitability affects company value.
Frequently Asked Questions (FAQs) about Factors that Influence the Company's Value in Manufacturing Companies Listed on the Indonesia Stock Exchange with Profitability as Intervening Variables

Q: What is the main objective of this study? A: The main objective of this study is to understand and analyze various factors that affect the company's value in the manufacturing industry listed on the Indonesia Stock Exchange (IDX) with a focus on profitability as an intervening variable.

Q: What are the factors that influence the company's value in this study? A: The factors that influence the company's value in this study are leverage, asset structure, company size, liquidity, growth, and audit quality.

Q: What is the role of profitability as an intervening variable in this study? A: In this study, profitability is proven to be a significant intervening variable in the relationship between liquidity and company value. This shows that good management of liquidity not only improves financial conditions, but can also increase profitability which ultimately has a positive impact on the company's value.

Q: What are the implications of this study for practice? A: The findings of this study have several implications for practice, including:

Financial management: Companies should focus on managing their financial resources effectively, including managing debt and cash flow.
Growth strategies: Companies should develop strategies to improve their growth prospects, including investing in research and development and expanding into new markets.
Audit quality: Companies should prioritize audit quality to increase investor confidence and improve their financial reporting.
Profitability: Companies should focus on improving their profitability by managing their costs and increasing their revenue.

Q: What are the limitations of this study? A: This study has several limitations, including:

Sample size: The sample size of 56 companies may not be representative of the entire manufacturing industry listed on the IDX.
Data quality: The quality of the data used in this study may be affected by the accuracy and completeness of the financial statements and other relevant information.
Methodology: The use of multiple regression analysis and path analysis may not capture the complexity of the relationships between the variables.

Q: What are the future research directions based on this study? A: This study provides several avenues for future research, including:

Investigating the impact of other factors: Future studies can investigate the impact of other factors, such as market conditions and industry trends, on company value.
Developing a more comprehensive model: Future studies can develop a more comprehensive model that includes additional variables and relationships.
Investigating the impact of profitability on company value: Future studies can investigate the impact of profitability on company value in more detail, including the mechanisms through which profitability affects company value.

Q: What are the practical implications of this study for investors and stakeholders? A: The findings of this study have several practical implications for investors and stakeholders, including:

Understanding the factors that influence company value: Investors and stakeholders should understand the factors that influence company value, including leverage, asset structure, company size, liquidity, growth, and audit quality.
Evaluating the impact of profitability on company value: Investors and stakeholders should evaluate the impact of profitability on company value, including the mechanisms through which profitability affects company value.
Making informed investment decisions: Investors and stakeholders should make informed investment decisions based on their understanding of the factors that influence company value and the impact of profitability on company value.

Q: What are the future directions for this research? A: The future directions for this research include:

Investigating the impact of other factors on company value: Future studies can investigate the impact of other factors, such as market conditions and industry trends, on company value.
Developing a more comprehensive model: Future studies can develop a more comprehensive model that includes additional variables and relationships.
Investigating the impact of profitability on company value: Future studies can investigate the impact of profitability on company value in more detail, including the mechanisms through which profitability affects company value.