Sales Growth and Company Value

Oct 13, 2025 by talynt.org 51 views

Analysis of the Effect of Sales Growth, Investment Decisions, Funding Decisions, and Dividend Policy on Company Value in the Food and Beverage Sector Listed on the Indonesia Stock Exchange (2017-2021)

Introduction

In a dynamic economic era, the food and beverage sector is one of the important pillars that contributes to Indonesia's economic growth. This sector is characterized by intense competition, rapid changes in consumer tastes, and the need for continuous innovation to stay ahead of the competition. As a result, companies in this sector must make strategic decisions that not only drive growth but also increase their value in the eyes of investors. This article analyzes the effect of sales growth, investment decisions, funding decisions, and dividend policies on company value in the food and beverage sector, especially in companies listed on the Indonesia Stock Exchange (IDX) in the 2017-2021 period.

Methodology

This study uses secondary data obtained from company financial statements through their official website. The sample analyzed consisted of 18 companies, and data was processed using multiple linear regression with EViews software. The analysis aims to identify the relationship between sales growth, investment decisions, funding decisions, and dividend policies on company value in the food and beverage sector.

Sales Growth and Company Value

Sales growth is usually the main indicator of the success of a company in attracting consumers. However, the results of the analysis show that sales growth has a negative and insignificant influence on the value of the company in this sector. This could be caused by several external factors, such as increasingly fierce competition in the market and fast changes in consumer tastes. Although sales increase, companies may have to offer lower prices or provide discounts to maintain market share, which can have a negative impact on profitability and company value.

The negative impact of sales growth on company value can be attributed to the following reasons:

Competition: The food and beverage sector is highly competitive, with many companies vying for market share. As a result, companies may have to offer lower prices or provide discounts to maintain market share, which can have a negative impact on profitability and company value.
Consumer tastes: Fast changes in consumer tastes can make it difficult for companies to maintain sales growth. Companies may have to invest heavily in research and development to stay ahead of the competition and maintain sales growth.
Profitability: Sales growth may not necessarily translate to profitability, especially if companies have to offer lower prices or provide discounts to maintain market share.

Investment Decision

Investment decisions are an important factor in company growth, but in this study, investment decisions also show negative and insignificant effects on company value. This may reflect that even though companies invest in developing new products or market expansion, the results do not necessarily increase the value of the company. Uncertainty in investment returns, especially in a very competitive sector, can cause investors to feel skeptical, which in turn can reduce the value of the company.

The negative impact of investment decisions on company value can be attributed to the following reasons:

Uncertainty: Uncertainty in investment returns can cause investors to feel skeptical, which can reduce the value of the company.
Competition: The food and beverage sector is highly competitive, and companies may not be able to recoup their investment in new products or market expansion.
Return on investment: Companies may not be able to achieve a high return on investment, especially if they invest in new products or market expansion.

Funding Decision

Conversely, funding decisions are proven to have a significant negative influence on the company's value. This shows that the way the company fund operations and expansion, either through debt or equity, can affect market perception. Excessive use of debt can increase the company's financial risk, which is often seen as a negative signal by investors. Therefore, wise management in managing funding structures is very necessary to maintain or even increase company value.

The negative impact of funding decisions on company value can be attributed to the following reasons:

Debt: Excessive use of debt can increase the company's financial risk, which is often seen as a negative signal by investors.
Equity: Companies may not be able to raise sufficient equity to fund operations and expansion, which can reduce the value of the company.
Market perception: The way companies fund operations and expansion can affect market perception, which can reduce the value of the company.

Dividend Policy

Dividend policy turns out to play an important role in increasing company value. Research shows that dividend policy has a positive and significant influence on company value. Consistent dividend payments are often seen as an indicator of the company's financial health. This not only provides direct returns for investors but also creates trust in the market, thus attracting more investments.

The positive impact of dividend policy on company value can be attributed to the following reasons:

Financial health: Consistent dividend payments are often seen as an indicator of the company's financial health.
Trust: Dividend payments create trust in the market, which can attract more investments.
Return on investment: Dividend payments provide direct returns for investors, which can increase the value of the company.

Conclusion

Overall, the results of this study indicate that although sales growth and investment decisions have no significant effect on company value, proper funding decisions and wise dividend policies can have a direct impact on the perception of company value in the eyes of investors. Therefore, companies in the food and beverage sector must pay attention to their funding strategies and dividend policies to increase the attractiveness and value in the market. This study provides important insights for company management and investors in understanding the factors that affect the value of companies in this very competitive industry.

Recommendations

Based on the findings of this study, the following recommendations are made:

Companies in the food and beverage sector should pay attention to their funding strategies: Companies should avoid excessive use of debt and ensure that they have sufficient equity to fund operations and expansion.
Companies in the food and beverage sector should implement wise dividend policies: Companies should pay consistent dividends to create trust in the market and attract more investments.
Investors should consider dividend policy when making investment decisions: Investors should consider dividend policy when making investment decisions, as it can have a direct impact on the value of the company.

Limitations

This study has several limitations, including:

Sample size: The sample size of this study is limited to 18 companies.
Data availability: The data used in this study is secondary data obtained from company financial statements.
Time period: The time period of this study is limited to 2017-2021.

Future Research Directions

Future research directions include:

Investigating the impact of sales growth on company value in other sectors: This study only investigates the impact of sales growth on company value in the food and beverage sector. Future research can investigate the impact of sales growth on company value in other sectors.
Investigating the impact of investment decisions on company value in other sectors: This study only investigates the impact of investment decisions on company value in the food and beverage sector. Future research can investigate the impact of investment decisions on company value in other sectors.
Investigating the impact of funding decisions on company value in other sectors: This study only investigates the impact of funding decisions on company value in the food and beverage sector. Future research can investigate the impact of funding decisions on company value in other sectors.
Q&A: Analysis of the Effect of Sales Growth, Investment Decisions, Funding Decisions, and Dividend Policy on Company Value in the Food and Beverage Sector Listed on the Indonesia Stock Exchange (2017-2021)

Q: What is the main objective of this study?

A: The main objective of this study is to analyze the effect of sales growth, investment decisions, funding decisions, and dividend policies on company value in the food and beverage sector listed on the Indonesia Stock Exchange (IDX) in the 2017-2021 period.

Q: What is the significance of this study?

A: This study is significant because it provides insights into the factors that affect company value in the food and beverage sector. The findings of this study can help company management and investors make informed decisions about funding strategies and dividend policies.

Q: What are the key findings of this study?

A: The key findings of this study are:

Sales growth has a negative and insignificant influence on company value in the food and beverage sector.
Investment decisions have a negative and insignificant influence on company value in the food and beverage sector.
Funding decisions have a significant negative influence on company value in the food and beverage sector.
Dividend policy has a positive and significant influence on company value in the food and beverage sector.

Q: What are the implications of these findings?

A: The implications of these findings are:

Companies in the food and beverage sector should pay attention to their funding strategies and avoid excessive use of debt.
Companies in the food and beverage sector should implement wise dividend policies to create trust in the market and attract more investments.
Investors should consider dividend policy when making investment decisions.

Q: What are the limitations of this study?

A: The limitations of this study are:

The sample size is limited to 18 companies.
The data used in this study is secondary data obtained from company financial statements.
The time period of this study is limited to 2017-2021.

Q: What are the future research directions?

A: The future research directions are:

Investigating the impact of sales growth on company value in other sectors.
Investigating the impact of investment decisions on company value in other sectors.
Investigating the impact of funding decisions on company value in other sectors.

Q: What are the practical implications of this study?

A: The practical implications of this study are:

Company management in the food and beverage sector should pay attention to their funding strategies and dividend policies.
Investors should consider dividend policy when making investment decisions.
Companies in the food and beverage sector should avoid excessive use of debt and ensure that they have sufficient equity to fund operations and expansion.

Q: What are the theoretical implications of this study?

A: The theoretical implications of this study are:

The study provides insights into the factors that affect company value in the food and beverage sector.
The study contributes to the existing literature on the impact of sales growth, investment decisions, funding decisions, and dividend policies on company value.

Q: What are the policy implications of this study?

A: The policy implications of this study are:

Regulatory bodies should consider the impact of funding decisions on company value when making policy decisions.
Regulatory bodies should consider the impact of dividend policy on company value when making policy decisions.

Q: What are the future research directions in terms of policy implications?

A: The future research directions in terms of policy implications are:

Investigating the impact of regulatory policies on company value in the food and beverage sector.
Investigating the impact of industry-specific regulations on company value in the food and beverage sector.