Financial Performance and Firm Value Lesson from Mining Sub-sector Companies on the Indonesia Stock Exchange

Yulita Setiawanta, Agus Purwanto, Much Azizum Hakim


This study aims to provide an overview of investor behavior on the current condition of the capital market in Indonesia and want to examine signal information about financial performance and prove directly the relation to firm value. This research was conducted on the issuer of mining sub-sector companies that has been listed in Indonesia Stock Exchange from 2015 to 2018. Using purposive sampling this research  get 100 data observed. The data obtained were analyzed using multiple linear regression with PLS SEM statistical tools. We found that capital structure and profitability  affect the firm value, but not for asset growth. Thus, it can be concluded that if two of three hypotheses accepted, can be interpreted that the signal information of financial performance from sample still hold interesting by an investor in the Indonesian Capital Market.


capital structure; asset growth; firm value; profitability

Full Text:



Abdullah, M., Shukor, Z. A., Mohamed, Z. M., & Ahmad, A. (2015). Risk management disclosure : A study on the effect of voluntary risk management disclosure toward firm value Maizatulakma. Journal of Applied Accounting Research, 16(3), 400–432.

Abor, J. (2005). The effect of capital structure on profitability: an empirical analysis of listed firms in Ghana. Journal of Risk Finance, 6(5), 438–445.

Aggarwal, D., & Padhan, P. C. (2017). Impact of Capital Structure on Firm Value : Evidence from Indian Hospitality Industry. Theoretical Economics Letters, 7, 982-1000-2086.

Akerlof, G. A. (1970). The Market for “Lemonsâ€: Quality Uncertainty and the Market Mechanism. The Quarterly Journal of Economics, 84(3), 488.

Akhtar M, W., Khan, F. A., Shahid, A., & Ahmad, J. (2016). Effects of Debt on Value of a Firm. Journal of Accounting & Marketing, 5(4).

Anastasia, M. (2012). Asset Growth and Firm Performance Evidence from Greece. International Journal of Business and Finance Research, 6(2), 113–124.

Antwi, S., Mills, E. F. E. A., & Zhao, X. (2012). Capital structure and firm value: Empirical evidence from Ghana. International Journal of Business and Social Science, 3(22), 103–111.

Atmaja, L. S. (2009). Governance Mechanisms and Firm Value : The Impact of Ownership Concentration and Dividends. Corporate Governance: An International Review, 17(6), 694–709.

Azmi, M., Andini, R., & Raharjo, K. (2016). Analisis Pengaruh Net Profit Margin (NPM), Retirn on Asset (ROA) dan Current Ratio (CR) Terhadap Harga Saham Emiten LQ45yang terdaftar di Bursa Efek Indonesia pada tahun 2010-2014. Journal Of Accounting, 2(2), 1–10.

Booth, L., Aivazian, V., & Demirguc-kunt, A. (2001). American Finance Association Capital Structures in Developing Countries. The Journal of Finance, 56(1), 87–130.

Bringham, E. F., & Houston, J. F. (2001). Fundamental of financial management (Eight Edit). USA: Cengange Learning.

Campbell, D., & Abdul Rahman, M. R. (2010). A longitudinal examination of intellectual capital reporting in Marks & Spencer annual reports, 1978-2008. British Accounting Review, 42(1), 56–70.

Chen, L., & Chen, S. (2011). “ The influence of profitability on firm value with capital structure as the mediator and firm size and industry as moderators †The influence of profitability on firm value with capital structure as the mediator and firm size and industry as moderators.

Chen, L. J., & Chen, S. Y. (2011). The influence of profitability on firm value with capital structure as the mediator and firm size and industry as moderators. Investment Management and Financial Innovations, 8(3), 121–129.

Chowdhury, A., & Paul Chowdhury, S. (2010). Impact of capital structure on firm’s value: Evidence from Bangladesh. Business and Economic Horizons, 3(3), 111–122.

Connelly, B. L., Certo, S. T., Ireland, R. D., & Reutzel, C. R. (2011). Signaling theory: A review and assessment. Journal of Management, 37(1), 39–67.

Constantinou, G., Karali, A., & Papanastasopoulos, G. (2017). Asset growth and the cross-section of stock returns: evidence from Greek listed firms. Journal of Management History, 55.

Cuong, N. T., & Canh, N. T. (2012). The Effect of Capital Structure on Firm Value for Vietnam’s.pdf. International Research Journal of Finance and Economics, (89), 221–233.

Dewi, P. Y. S., Yuniarta, G. adi, & Atmadja, A. W. T. (2014). Pengaruh Struktur MOdal , Pertumbuhan Perusahaan dan Profitabilitas erhadap Nilai Perusahaan pada Perusahaan LQ 45 DI BEI Periode 2008-2012. E-Journal S1 Ak Universitas Pendidikan Ganesha, 2(1).

Dhani, I. P., & Utama, A. . G. S. (2017). Pengaruh pertumbuhan perusahaan, struktur modal, dan profitabilitas terhadap nilai perusahaan. Jurnal Riset Akuntansi Dan Bisnis Airlangga, 2(1), 135–148.

Filatotchev, I., & Bishop, K. (2002). Board composition, share ownership, and underpricing’ of U.K. IPO firms. Strategic Management Journal, 23(10), 941–955.

Frederic H.Murphy, Aharon R.Ofer, M. A. S. (1975). Capital Structure and Firm Value. Graduated School of Management Northwesttern University, (July 16, 1975).

Fu, F. What is Behind the Asset Growth and Investment Growth Anomalies ? (2011).

Fumani, M. A., & Moghadam, D. A. (2015). Investigation of the Effects of Capital Structure on Value of Listed Companies in Tehran Stock Exchange. Journal of Finance and Accounting, 6(15), 50–58.

Gharaibeh, A. M. O., & Sarea, A. M. (2015). The impact of capital structure and certain firm specific variables on the value of the firm: Empirical evidence from Kuwait. Corporate Ownership and Control, 13(1CONT10), 1191–1200.

Ghozali, I. (2016). Desain Penelitian Kuantitatif dan Keualitatif untuk akuntansi , Bisnis dan Ilmu sosial lainya (1st ed.). Yoga Pratama.

Gill, A., Biger, N., & Mathur, N. (2011). The Effect of Capital Structure on Profitability: Evidence from the United States. International Journal of Management, 28(4), 3–15.

Hakim, L. (2018). Determinant Profitability and Implications on the Value of the Company : Empirical Study on Banking Industry in IDX, 8(1), 205–216.

Hestinoviana, V., & Handayani, S. R. (2010). the Influence of Profitability , Solvability , Asset Growth , and Sales Growth Toward Firm Value.

Jensen, M. (1986). American Economic Association Agency Costs of Free Cash Flow , Corporate Finance , and Takeovers Author ( s ): Michael C . Jensen Source : The American Economic Review , Vol . 76 , No . 2 , Papers and Proceedings of the Ninety-Eighth Annual Meeting of the. American Economic Review, 76(2), 323–329.

Kasmir. (2012). Analisis Laporan Keuangan. Jakarta: PT Raja Geafindopersada.

Kee H.chung, S. W. P. (1994). A Simple Approximation of tobin’s q. Financial Management, 23(3), 70–74.

Kodongo, O., Mokoaleli-Mokoteli, T., & Maina, L. (2015). Capital structure, profitability and firm value: panel evidence of listed firms in Kenya. African Finance Journal, 17(1), 1–20.

Lin, F. L., & Chang, T. (2011). Does debt affect firm value in Taiwan? a panel threshold regression analysis. Applied Economics, 43(1), 117–128.

Malinić, D., DenÄić, K., & Ljubenović, E. (2013). The Determinants of Capital Structure in Emerging Capital Markets : Evidence from Serbia. European Research Studies, 16(2), 98–119.

Mantari, J. S., & Nuryasman. (2017). Moderation Effect of Exchange Rate to Signaling Theory Validity in Indonesia Stock Exchange. Business and Management Studies, 3(1), 80.

Maria Goranova, Todd M. Alessandri, Pemlea Brandes, R. D. (2007). Managerial Ownership and Corporate Diversification : A Longitudinal View. Strategic ManagementJournal, 28(1), 211–225.

Merton H Miller and Franco Modigliani. (1958). The American economic, 48(3), 261–297.

Modigliani, F., & Miller, M. H. M. (1963). American Economic Association Corporate Income Taxes and the Cost of Capital : A Correction. American Economic Review, 53(3), 433–443.

Mugosa, A. (2015). The determinants of capital structure choice: Evidence from Western Europe. Business and Economic Horizons, 11(2), 76–95.

Mwangi, L. W., Makau, S. M., & Kosimbei, G. (2014). Relationship between Capital Structure and Performance of Non- Financial Companies Listed In the Nairobi Securities Exchange, Kenya. Global Journal of Contemporary Research in Accounting, Auditing and Business Ethics (GJCRA), 1(2), 72–90.

Naceur, S. Ben, & Goaied, M. (2002). The relationship between dividend policy, financial structure, profitability and firm value. Applied Financial Economics, 12(12), 843–849.

Obeid Gharaibeh, A. M., & Sarea, A. M. (2015). the Impact of Capital Structure and Certain Firm Specific Variables on the Value of the Firm: Empirical Evidence From Kuwait. Corporate Ownership and Control, 13(1).

Ogbulu, M., & Emeni, F. (2012). Capital Structure and Firm Value: Empirical Evidence from Nigeria. Internatioanl Journal of Business and Social Sciense, 3(19), 252–261.

Owen, A. L., Pereira, J., College, H., College, H., Owen, A. L., & Pereira, J. M. (2016). Mp r a, (73598).

Purwohandoko. (2017). The Influence of Firm’s Size, Growth, and Profitability on Firm Value with Capital Structure as the Mediator: A Study on the Agricultural Firms Listed in the Indonesian Stock Exchange. International Journal of Economics and Finance, 9(8), 103.

Pyle, Hayne E. Leland, D. H. (1977). Informational Asymmetries, Financial Structure, and Financial Intermediation. Aionmerican Finance Associat, 32(2), 371–387.

Rahmawati, A. D., Topowijono, & Sulasmiyati, S. (2015). Pengaruh Ukuran Perusahaan, Profitabilitas, struktur Modal dan Keputusan Investasi terhadap Nilai Perusahaan( Studi pada Perusahaan Sektor Properti , Real Estate , dan Building Construction yang Terdaftar di Bursa Efek Indonesia ( BEI ) Periode 2010-2013. Jurnal Administrasi Bisnis (JAB, 23(2), 1–7.

Rajan, R. G., & Zingales, L. (1995). What Do We Know about Capital Structure? Some Evidence from International Data What Do We Know about Capital Structure? Some Evidence from International Data. The Journal of Finance, 50(5), 1421–1460.

Ramadan, Z. S., & Ramadan, I. Z. (2015). Capital Structure and Firm’s Performance of Jordanian Manufacturing Sector. International Journal of Economics and Finance, 7(6), 279–284.

Rasyid, A. (2015). Effects of ownership structure, capital structure, profitability and company’s growth towards firm value. International Journal of Business and Management Invention ISSN (Online, 4(4), 25-31-8028.

Ross, S. A. (1977). The Determination of Financial Structure: The Incentive-Signalling Approach. The Bell Journal of Economics, 8(1), 23.

Sarita, B., & Takdir, D. S. (2009). The Effect of Profitability on Firm Value in Manufacturing Company at Indonesia Stock Exchange. The International Journal Of Engineering And Science, 2319–1813. Retrieved from

Shekhar, S., Mishra, D., Agrawal, A., & Sahu, K. K. (2017). Physico-chemical treatment of glauconitic sandstone to recover potash and magnetite. Journal of Cleaner Production, 147, 681–693.

Sidhu, M. K. (2018). Impact of Leverage of a Company on Stock Market Liquidity in Indian Markets, 20(1), 1–8.

Soedarsa, H. G., & Arika, P. R. (2015). The influence of Inflation, GDP, Growth, Size, Leverage and Profitability Towards Stock Price onProperty and Real estate Companies Listed in Indonesia Stick Exchange Period 2005-2013. The 3rd International Multidisciplinary Conference on Social Sciences, 2460–0598, II-50.

Spence, M. (1973). Job Market Signaling. The Quarterly Journal of Economics, 87(3), 355.

Sriwardany. (2006). pengaruh Pertumbuhan Perusahaanterhadap Kebijaksanaan Struktur Modal dan Dampaknya terhadap Perubahan Harga Saham pada Perusahaan Manufaktur. Tesis Program Pasca Sarjana Universitas Sumatra Utara.

Stucke, M. E. (2013). Is competition always good? Journal of Antitrust Enforcement, 1(1), 162–197.

Sucuahi, W., & Cambarihan, J. M. (2016). Influence of Profitability to the Firm Value of Diversified Companies in the Philippines. Accounting and Finance Research, 5(2).

Susi Hotmaida Hutabarat, Fitrawaty, E. W. N. (2018). An Analysis of Asset Growth, Profitability and Caiptal. International Journal of Business and Management Review, 6(2), 29–44.

Suwardika, I. N. A., & Mustanda, I. K. (2017). Pengaruh Leverage, Ukurab Perusahaan, Pertumbuhan Perusahaan dan Profitabilitas terhadap Nilai Perusahaan pada Perusahaan Properti. E-Jurnal Manajemen Unud, 6(3), 1248–1277.

Tui, S., Nurnajamuddin, M., Sufri, M., & Nirwana, A. (2017). Determinants of Profitability and Firm Value: Evidence from Indonesian Banks. IRA-International Journal of Management & Social Sciences IRA-International Journal of Management & Social Sciences IRA-International Journal of Management & Social Sciences, 7(71), 84–95.

Varaiya, N., & Kerin, R. A. (2016). The Relationship between Growth , Profitability , and Firm Value Author ( s ): Nikhil Varaiya , Roger A . Kerin and David Weeks Published by : Wiley Stable URL : Accessed : 06-05-2016 08 : 27 UTC Your use of the JSTOR a, 8(5), 487–497.



Creative Commons License
Jurnal Dinamika Akuntansi is licensed under a Creative Commons Attribution 4.0 International License