Authors :
Nadia Raniya Hameeda
Volume/Issue :
Volume 7 - 2022, Issue 7 - July
Google Scholar :
https://bit.ly/3IIfn9N
Scribd :
https://bit.ly/3AeK4Rx
DOI :
https://doi.org/10.5281/zenodo.7016292
Abstract :
The purpose of this paper is to analyze the
significance relationship between variables used as
indicators of banks’ financial performance, namely the
Capital Adequacy Ratio (CAR), Return on Assets (ROA),
Operational Efficiency Ratio (OER), Net Interest Margin
(NIM), and Non-Performing Loan ratio (NPL) towards the
banks’ value, measured by the Price to Book Value (PBV),
from the year 2017 until 2021, specifically in Indonesia.
Design/methodology/approach – This paper is using a
quantitative analysis approach with correlation research
strategy and the type of data used in this research is timeseries and cross-section data that are secondary data,
namely the financial indicators of the banking companies
sourced from financial databases. The population of this
research is banking companies that are listed under the
Indonesia Stock Exchange (IDX). Purposive sampling
technique is used in this research, and 13 companies are
collected for data analysis. This research applied panel
data regression analysis, using Random Effect model.
Findings – The results show that there is a significant and
positive relationship between the ROA and the NIM
towards the PBV of the banking companies. Meanwhile,
there is no significant influence of the Capital Adequacy
Ratio (CAR), Operational Efficiency Ratio (OER), and
Non-Performing Loan ratio (NPL) toward the PBV of the
companies.
Originality – The managers of the banking companies can
seek to focus on optimizing the profitability of the
companies to aim for higher company value, due to the
positive and significant relationship results between the
ROA and NIM to the PBV.
Keywords :
Company Value, Panel Data Regression, Price to Book Value, Profitability, Random Effect Model.
The purpose of this paper is to analyze the
significance relationship between variables used as
indicators of banks’ financial performance, namely the
Capital Adequacy Ratio (CAR), Return on Assets (ROA),
Operational Efficiency Ratio (OER), Net Interest Margin
(NIM), and Non-Performing Loan ratio (NPL) towards the
banks’ value, measured by the Price to Book Value (PBV),
from the year 2017 until 2021, specifically in Indonesia.
Design/methodology/approach – This paper is using a
quantitative analysis approach with correlation research
strategy and the type of data used in this research is timeseries and cross-section data that are secondary data,
namely the financial indicators of the banking companies
sourced from financial databases. The population of this
research is banking companies that are listed under the
Indonesia Stock Exchange (IDX). Purposive sampling
technique is used in this research, and 13 companies are
collected for data analysis. This research applied panel
data regression analysis, using Random Effect model.
Findings – The results show that there is a significant and
positive relationship between the ROA and the NIM
towards the PBV of the banking companies. Meanwhile,
there is no significant influence of the Capital Adequacy
Ratio (CAR), Operational Efficiency Ratio (OER), and
Non-Performing Loan ratio (NPL) toward the PBV of the
companies.
Originality – The managers of the banking companies can
seek to focus on optimizing the profitability of the
companies to aim for higher company value, due to the
positive and significant relationship results between the
ROA and NIM to the PBV.
Keywords :
Company Value, Panel Data Regression, Price to Book Value, Profitability, Random Effect Model.