The Effect of Total Assets and Profitability on Company Value with Good Corporate Governance as Moderating Variables

Oct 13, 2025 by talynt.org 37 views

The Effect of Total Assets and Profitability on Company Value with Good Corporate Governance as Moderating Variables

In today's fast-paced business world, the success of a company is often measured by its share price. A high stock price can reflect an increase in company value and have a positive impact on market confidence. This article will discuss the effect of total asset turnover and profitability on company value, especially in companies in the food and beverage sector listed on the Indonesia Stock Exchange during the 2010-2019 period. In addition, this article will also explore the role of Good Corporate Governance (GCG) as a moderating variable in this study.

Research Background

The food and beverage sector is one of the industries that experienced rapid growth in Indonesia. With increasing consumer demand and purchasing power, companies in this sector seek to improve their financial performance. This study includes 26 companies listed on the Indonesia Stock Exchange in the food and beverage sector, with a total of 140 data observations taken from the annual financial statements. The data used is secondary data, and data analysis is carried out using panel regression and moderation of interaction test with the help of EViews10 software.

Understanding the Importance of Total Asset Turnover and Profitability

Total asset turnover and profitability are two key financial metrics that can significantly impact a company's value. Total asset turnover measures a company's ability to generate sales from its assets, while profitability measures a company's ability to generate earnings from its sales. A high total asset turnover and profitability can indicate a company's efficiency and effectiveness in using its assets to generate revenue and profits.

Research Findings

The results showed that profitability has a positive and significant influence on the company's value at the 5% alpha level. This indicates that the higher the profitability obtained by the company, the higher the company's value in the eyes of investors. Meanwhile, the total turnover of assets shows a positive effect, but is not significant on the company's value. This can be interpreted that although there is a relationship between the efficiency of the use of assets and company values, the influence is not strong enough to be considered significant in this study.

The Role of Good Corporate Governance

Good Corporate Governance (GCG) is a set of principles and practices that aim to promote transparency, accountability, and fairness in the management of a company. GCG can play a crucial role in strengthening the relationship between profitability and company value. The results of this study show that Good Corporate Governance can moderate the effect of profitability on company value, but not the effect of total asset turnover on company value.

Analysis and Implications

The results of this study provide important insights for company management in the food and beverage sector. Increased profitability must be the main focus, given its significant effect on company value. Companies can innovate product, operational efficiency, and better marketing strategies to increase their profit margin.

The Importance of Good Corporate Governance

The application of Good Corporate Governance is very important, not only to increase investor confidence, but also to strengthen the relationship between profitability and company value. Transparent and accountable companies are more likely to attract investors and get better support from the market.

Conclusion

This study provides empirical evidence of the effect of profitability and total asset turnover on the value of the company in the food and beverage industry listed on the Indonesia Stock Exchange. By showing the importance of the practice of good corporate governance, this research underlines the need for companies not only to focus on financial aspects, but also on good governance in order to achieve optimal performance and increase company value in a sustainable manner.

Recommendations for Future Research

This study provides a foundation for future research on the effect of total asset turnover and profitability on company value, with Good Corporate Governance as a moderating variable. Future research can explore the effect of other variables, such as market competition and industry trends, on company value. Additionally, future research can examine the impact of Good Corporate Governance on company value in other industries and countries.

Limitations of the Study

This study has several limitations. The data used is secondary data, which may not be comprehensive or up-to-date. Additionally, the study only examines the effect of total asset turnover and profitability on company value, without considering other factors that may influence company value. Future research can address these limitations by using primary data and examining the effect of other variables on company value.

Conclusion

In conclusion, this study provides empirical evidence of the effect of profitability and total asset turnover on the value of the company in the food and beverage industry listed on the Indonesia Stock Exchange. The results show that profitability has a significant effect on company value, while total asset turnover has a positive but not significant effect. Good Corporate Governance is proven to strengthen the effect of profitability on company value, but not the effect of total asset turnover on company value. This study provides important insights for company management in the food and beverage sector and highlights the need for companies to focus on good governance in order to achieve optimal performance and increase company value in a sustainable manner.
Frequently Asked Questions (FAQs) on the Effect of Total Assets and Profitability on Company Value with Good Corporate Governance as Moderating Variables

In this article, we will address some of the most frequently asked questions related to the effect of total assets and profitability on company value with Good Corporate Governance as moderating variables.

Q: What is the significance of total asset turnover and profitability in determining company value?

A: Total asset turnover and profitability are two key financial metrics that can significantly impact a company's value. Total asset turnover measures a company's ability to generate sales from its assets, while profitability measures a company's ability to generate earnings from its sales. A high total asset turnover and profitability can indicate a company's efficiency and effectiveness in using its assets to generate revenue and profits.

Q: What is the role of Good Corporate Governance in determining company value?

A: Good Corporate Governance (GCG) is a set of principles and practices that aim to promote transparency, accountability, and fairness in the management of a company. GCG can play a crucial role in strengthening the relationship between profitability and company value. The results of this study show that Good Corporate Governance can moderate the effect of profitability on company value, but not the effect of total asset turnover on company value.

Q: What are the implications of the study's findings for company management in the food and beverage sector?

A: The results of this study provide important insights for company management in the food and beverage sector. Increased profitability must be the main focus, given its significant effect on company value. Companies can innovate product, operational efficiency, and better marketing strategies to increase their profit margin.

Q: What are the limitations of the study?

A: This study has several limitations. The data used is secondary data, which may not be comprehensive or up-to-date. Additionally, the study only examines the effect of total asset turnover and profitability on company value, without considering other factors that may influence company value. Future research can address these limitations by using primary data and examining the effect of other variables on company value.

Q: What are the recommendations for future research?

A: This study provides a foundation for future research on the effect of total asset turnover and profitability on company value, with Good Corporate Governance as a moderating variable. Future research can explore the effect of other variables, such as market competition and industry trends, on company value. Additionally, future research can examine the impact of Good Corporate Governance on company value in other industries and countries.

Q: What are the implications of the study's findings for investors and stakeholders?

A: The results of this study provide important insights for investors and stakeholders. Companies that apply good corporate governance practices tend to have a higher company value, especially when profitability increases. Investors and stakeholders should consider the importance of good corporate governance when evaluating a company's value and potential for growth.

Q: What are the implications of the study's findings for policymakers and regulators?

A: The results of this study provide important insights for policymakers and regulators. The study highlights the need for companies to focus on good governance in order to achieve optimal performance and increase company value in a sustainable manner. Policymakers and regulators should consider the importance of good corporate governance when developing policies and regulations that impact the business sector.

Q: What are the implications of the study's findings for the food and beverage industry?

A: The results of this study provide important insights for the food and beverage industry. The study highlights the need for companies in the industry to focus on increasing profitability and applying good corporate governance practices in order to achieve optimal performance and increase company value in a sustainable manner.

Conclusion

In conclusion, this article provides answers to some of the most frequently asked questions related to the effect of total assets and profitability on company value with Good Corporate Governance as moderating variables. The study's findings provide important insights for company management, investors, stakeholders, policymakers, regulators, and the food and beverage industry.