Fundamental Ratios and Company Value in Potentially Delisted Firms on IDX 2019-2023
Annisa Aulya, Sri Afrah Wandri, Ela Dwi Putri, Bunga Nafila Firanti, Melani Novia Putri, Nabila Adzkia Putri, Rahmatul Fajriah and Yeasy Darmayanti
1Student of Accounting Department, Universitas Bung Hatta, Indonesia.
2Accounting Department of Universitas Bung Hatta, Indonesia.
ABSTRACT
This study discusses the impact of the CR, DER, ROA, and FAT ratios on the company’s value, focusing on the condition of the company that is experiencing financial difficulties. The companies studied are companies listed on the Indonesia Stock Exchange (IDX) during the period 2019 to 2023. Tobin’s Q is an important metric for investors to assess a company’s value, providing an overview of the growth prospects and operational efficiency of management. This research is motivated by the condition of companies that have the potential to experience delisting from the IDX, one of which is caused by financial distress. The research sample consisted of 14 non-financial companies that experienced financial distress and had complete annual reports for the 2019-2023 period, which were selected using purposive sampling techniques from a population of 44 non-financial companies that have the potential to be delisted according to the IDX. Secondary data is obtained from the annual report on the IDX’s official website. The results of the hypothesis test show that the current ratio and return on assets do not have a significant influence on the company’s value in companies experiencing financial distress. On the other hand, the debt-to-equity ratio was found to have a negative and significant effect on the value of the company. Meanwhile, the ratio of fixed asset turnover activities has a positive and significant effect on the company’s value. This research model has a strong capability, with an R-squared value of 70%. This research provides a new perspective on the importance of operational efficiency even in crisis conditions for companies experiencing financial distress.
Keywords: Current ratio, Debt to equity ratio, Return on asset, Fixed aset turnover, Tobins Q, Financial distress