The Effect of Financial Ratios on the Firm Value

Abstract

This study aims to examine the effect of financial ratios on firm value in investment sector
companies listed on the Indonesia Stock Exchange for the 2014-2018 period. This study uses
panel data analysis method to determine financial ratios that affect firm value (Profitability,
Leverage and Tangibility) in investment companies listed on the Indonesia Stock Exchange,
using a sample of 8 companies selected using purposive sampling method. The results of
empirical testing state that the Debt to Asset Ratio has a positive effect on firm value, while
Net Profit Margin and Asset Tangibility have no effect on firm value.