The effect of liabilities plan and earnings performance on firm’s worth moderated by independent commissioners

  • Frans Lengo Boro 
    Universitas Widyatama Bandung
    Indonesia
  • Fahreza Eka Yudha
    Universitas Widyatama Bandung
    Indonesia
  • Nuryaman Nuryaman
    Universitas Widyatama Bandung
    Indonesia

Abstract

Competition in the business world keeps Indonesian economy growing. The aim of study is in order to test correlation between liabilities plan and earnings performance on firm’s worth, as well as moderation by independent commissioners on this correlation. The method is descriptive and verification method. Data collection was carried out by secondary data tracking. The research was conducted with a sample of 39 companies through non-probability sampling methods. Collected data is analyzed using descriptive analysis and verification analysis assisted by Microsoft Office Excel 2016 and Eviews 9 applications. The findings indicated that value of company was not impacted by liabilities plan. Earnings performance has a positive and significant impact on Firm's worth. Independent commissioners have a considerable and beneficial effect on firm’s worth. Independent commissioners are unable to weaken influence of debt policies on firm’s worth. Independent commissioners can enhance impact of earnings performance on firm's worth.
Keywords
  • Liabilities Plan
  • Earnings Performance
  • Firm’s Worth
  • Independent Commissioners
References
  1. Abdi, H., & Omri, M. A. B. (2020). Web-based disclosure and the cost of debt: MENA countries evidence. Journal of Financial Reporting and Accounting, 18(3), 533–561. https://doi.org/10.1108/JFRA-07-2019-0088
  2. Bartov, E., Faurel, L., & Mohanram, P. S. (2018). Can Twitter help predict firm-level earnings and stock returns? The Accounting Review, 93(3), 25–57. https://doi.org/10.2308/accr-51865
  3. Berzkalne, I., & Zelgalve, E. (2014). Intellectual capital and company value. Procedia-Social and Behavioral Sciences, 110, 887–896. https://doi.org/https://doi.org/10.1016/j.sbspro.2013.12.934
  4. Darmadi, S. (2013). Corporate governance disclosure in the annual report: An exploratory study on Indonesian Islamic banks. Humanomics, 29(1), 4–23. https://doi.org/10.1108/08288661311299295
  5. Firmansyah, D., Surasni, N. K., & Pancawati, S. (2020). Pengaruh CSR Terhadap Nilai Perusahaan Dengan Good Corporate Governance Dan Ukuran Perusahaan Sebagai Variabel Pemoderasi. E-Jurnal Akuntansi, 30(1), 163–178.
  6. Hashmi, S. D., Gulzar, S., Ghafoor, Z., & Naz, I. (2020). Sensitivity of firm size measures to practices of corporate finance: evidence from BRICS. Future Business Journal, 6, 1–19. https://doi.org/https://doi.org/10.1186/s43093-020-00015-y
  7. Heikal, M., Khaddafi, M., & Ummah, A. (2014). Influence analysis of return on assets (ROA), return on equity (ROE), net profit margin (NPM), debt to equity ratio (DER), and current ratio (CR), against corporate profit growth in automotive in Indonesia Stock Exchange. International Journal of Academic Research in Business and Social Sciences, 4(12), 101. https://doi.org/10.6007/IJARBSS/v4-i12/1331
  8. Machmuddah, Z., Sari, D. W., & Utomo, S. D. (2020). Corporate social responsibility, profitability and firm value: Evidence from Indonesia. The Journal of Asian Finance, Economics and Business, 7(9), 631–638. https://doi.org/10.13106/jafeb.2020.vol7.no9.631
  9. Manurung, E., Effrida, E., & Gondowonto, A. J. (2019). Effect of financial performance, good corporate governance and corporate size on corporate value in food and beverages. International Journal of Economics and Financial Issues, 9(6), 100. https://doi.org/10.32479/ijefi.8828
  10. Markonah, M., Salim, A., & Franciska, J. (2020). Effect of profitability, leverage, and liquidity to the firm value. Dinasti International Journal of Economics, Finance & Accounting, 1(1), 83–94. https://doi.org/10.38035/dijefa.v1i1.225
  11. Medina, R., & Medina, A. (2014). The project manager and the organisation’s long-term competence goal. International Journal of Project Management, 32(8), 1459–1470. https://doi.org/https://doi.org/10.1016/j.ijproman.2014.02.011
  12. Murniati, S. (2016). Effect of capital structure, company size and profitability on the stock price of food and beverage companies listed on the Indonesia Stock Exchange. Information Management and Business Review, 8(1), 23–29. https://doi.org/10.22610/imbr.v8i1.1192
  13. Natalia, I., & Ellitan, L. (2019). Strategies to achieve competitive advantage in industrial revolution 4.0. International Journal of Research Culture Society, 3(6), 10–16. https://doi.org/10.2017/IJRCS/
  14. Nuryaman & Veronica, C. (2015). Metodologi Penelitian Akuntansi dan Bisnis. In Bogor: Ghalia Indonesia.
  15. Purwanti, T. (2020). The effect of profitability, capital structure, company size, and dividend policy on company value on the indonesia stock exchange. International Journal of Seocology, 01(02), 60–66. https://doi.org/https://doi.org/10.29040/seocology.v1i02.9
  16. Putri, I. G. A. P. T., & Rahyuda, H. (2020). Effect of capital structure and sales growth on firm value with profitability as mediation. International Research Journal of Management, IT and Social Sciences, 7(1), 145–155.
  17. Ramadhan, M. A., & Firmansyah, A. (2022). The supervision role of independent commissioner in decreasing risk from earnings management and debt policy. Accounting Analysis Journal, 11(1), 31–43. https://doi.org/10.15294/aaj.v11i1.58178
  18. Rostami, V., & Rezaei, L. (2022). Corporate governance and fraudulent financial reporting. Journal of Financial Crime, 29(3), 1009–1026. https://doi.org/10.1108/JFC-07-2021-0160
  19. Sagala, F. Z. (2020). The Effect of Accounting Information Systems and Internal Control of Employee Performance. JASa (Jurnal Akuntansi, Audit Dan Sistem Informasi Akuntansi), 4(1), 69–81. https://doi.org/10.36555/jasa.v4i1.760
  20. Shiller, R. J. (2013). Capitalism and financial innovation. Financial Analysts Journal, 69(1), 21–25. https://doi.org/https://doi.org/10.2469/faj.v69.n1.4
  21. Smith, W. L., Boje, D. M., & Foster III, T. W. (2013). A tetranormalization intervention of the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB). Recherches En Sciences de Gestion, 6, 65–101. https://doi.org/https://doi.org/10.3917/resg.099.0065
  22. Sugiyanto, E., Trisnawati, R., & Kusumawati, E. (2021). Corporate social responsibility and firm value with profifitability, firm size, managerial ownership, and board of commissioners as moderating variables. Riset Akuntansi Dan Keuangan Indonesia, 6(1), 22–30. https://doi.org/10.23917/reaksi.v6i1.14107
  23. Suhendry, W., Toni, N., & Simorangkir, E. N. (2021). Effect of Debt to Equity Ratio and Current Ratio on Company Value with Return on Assets as Intervening Variable in Consumer Goods Industrial Companies Listed on the Indonesia Stock Exchange for the 2015–2018 Period. Journal of Economics, Finance and Management Studies, 4(8), 1444–1449. https://doi.org/10.47191/jefms/v4-i8-22
  24. Sukmawardini, D., & Ardiansari, A. (2018). The influence of institutional ownership, profitability, liquidity, dividend policy, debt policy on firm value. Management Analysis Journal, 7(2), 211–222. https://doi.org/10.15294/MAJ.V7I2.24878
  25. Tahu, G. P., & Susilo, D. D. B. (2017). Effect of liquidity, leverage and profitability to the firm value (dividend policy as moderating variable) in manufacturing company of indonesia stock exchange. Research Journal of Finance and Accounting, 8(18), 89–98.
  26. Widia Astuty, S. E., Si, M., & Ak, Q. I. A. (2015). The extraordinary solution for Indonesia economic crisis: Shariah capital market. Journal of Finance, 3(2), 47–56.
  27. Yang, H., Ryu, D., & Ryu, D. (2017). Investor sentiment, asset returns and firm characteristics: Evidence from the Korean stock market. Investment Analysts Journal, 46(2), 132–147. https://journals.co.za/doi/abs/10.1080/10293523.2016.1277850

Downloads

PDF

Statistic

Abstract Views
: 407 times
PDF
: 0 times