FINANCIAL PERFORMANCE, ECONOMIC VALUE ADDED, AND STOCK RETURN OF PHARMACEUTICAL COMPANIES

The Covid-19 pandemic that has lasted almost two years has the potential to create opportunities to encourage domestic pharmaceutical industry production, resulting in a significant increase in demand for pharmaceutical commodities and medical devices related to Covid-19 handling. However, the ph...

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Main Author: Azahra, Nabila
Format: Theses
Language:Indonesia
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Online Access:https://digilib.itb.ac.id/gdl/view/63706
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Institution: Institut Teknologi Bandung
Language: Indonesia
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spelling id-itb.:637062022-02-24T18:33:16ZFINANCIAL PERFORMANCE, ECONOMIC VALUE ADDED, AND STOCK RETURN OF PHARMACEUTICAL COMPANIES Azahra, Nabila Manajemen umum Indonesia Theses Financial Performance, Financial Ratios, Economic Value Added, Pharmaceutical Companies, Pandemic INSTITUT TEKNOLOGI BANDUNG https://digilib.itb.ac.id/gdl/view/63706 The Covid-19 pandemic that has lasted almost two years has the potential to create opportunities to encourage domestic pharmaceutical industry production, resulting in a significant increase in demand for pharmaceutical commodities and medical devices related to Covid-19 handling. However, the pharmaceutical sector is facing many obstacles, including Large-Scale Social Restrictions (PSBB), Work from Home, and other health regulations, to sustain the company's solid financial performance in the long run. To thrive in the pharmaceutical sector in the face of the obstacles mentioned earlier, each company must maintain its financial performance. This research is included in the type of descriptive research using a quantitative approach, with the sample of 9 pharmaceutical companies listed in the Indonesia Stock Exchange for 2016-2020. The author will use indicators of the company's financial performance assessment using financial ratios, such as Current Ratio (CR), Debt-to-Equity Ratio (DER), Total Assets Turnover (TATO), and Economic Value Added (EVA). This study will also assess the relationship between the company's financial performance using financial ratio and EVA analysis to the company's stock return using panel data regression model and hypothesis testing, partially or simultaneously using t-test and F test. Based on the financial ratio analysis, three categories of financial ratios give different implications for each company. Based on the economic value-added analysis, companies with negative EVA should improve their performance by projecting it to move into positive territory. Based on the statistical tools’ analysis using EViews 10, it can be concluded that the Current Ratio and Debtto-Equity Ratio accepted the partial hypothesis test that both ratios have a significant effect on stock return. At the same time, Total Assets Turnover and EVA rejected the partial hypothesis test that both ratios have no significant effect on stock return. Simultaneously, CR, DER, TATO, and EVA, have no significant effect on stock return. It can be seen that investors should steer clear of firms with poor financial performance, particularly those with constantly negative EVA. Fundamental performance, as reflected by the financial ratios of pharmaceutical companies, can be affected by the uncertainty of the pharmaceutical industry. Therefore, future research can add another control variable as a determinant of a company's financial condition that may significantly affect the company's stock return. Future research may also consider the internal factors of the companies and external factors that may occur to increase the accuracy of their performance assessment, especially during the bizarre phenomenon of the Covid-19 Pandemic. text
institution Institut Teknologi Bandung
building Institut Teknologi Bandung Library
continent Asia
country Indonesia
Indonesia
content_provider Institut Teknologi Bandung
collection Digital ITB
language Indonesia
topic Manajemen umum
spellingShingle Manajemen umum
Azahra, Nabila
FINANCIAL PERFORMANCE, ECONOMIC VALUE ADDED, AND STOCK RETURN OF PHARMACEUTICAL COMPANIES
description The Covid-19 pandemic that has lasted almost two years has the potential to create opportunities to encourage domestic pharmaceutical industry production, resulting in a significant increase in demand for pharmaceutical commodities and medical devices related to Covid-19 handling. However, the pharmaceutical sector is facing many obstacles, including Large-Scale Social Restrictions (PSBB), Work from Home, and other health regulations, to sustain the company's solid financial performance in the long run. To thrive in the pharmaceutical sector in the face of the obstacles mentioned earlier, each company must maintain its financial performance. This research is included in the type of descriptive research using a quantitative approach, with the sample of 9 pharmaceutical companies listed in the Indonesia Stock Exchange for 2016-2020. The author will use indicators of the company's financial performance assessment using financial ratios, such as Current Ratio (CR), Debt-to-Equity Ratio (DER), Total Assets Turnover (TATO), and Economic Value Added (EVA). This study will also assess the relationship between the company's financial performance using financial ratio and EVA analysis to the company's stock return using panel data regression model and hypothesis testing, partially or simultaneously using t-test and F test. Based on the financial ratio analysis, three categories of financial ratios give different implications for each company. Based on the economic value-added analysis, companies with negative EVA should improve their performance by projecting it to move into positive territory. Based on the statistical tools’ analysis using EViews 10, it can be concluded that the Current Ratio and Debtto-Equity Ratio accepted the partial hypothesis test that both ratios have a significant effect on stock return. At the same time, Total Assets Turnover and EVA rejected the partial hypothesis test that both ratios have no significant effect on stock return. Simultaneously, CR, DER, TATO, and EVA, have no significant effect on stock return. It can be seen that investors should steer clear of firms with poor financial performance, particularly those with constantly negative EVA. Fundamental performance, as reflected by the financial ratios of pharmaceutical companies, can be affected by the uncertainty of the pharmaceutical industry. Therefore, future research can add another control variable as a determinant of a company's financial condition that may significantly affect the company's stock return. Future research may also consider the internal factors of the companies and external factors that may occur to increase the accuracy of their performance assessment, especially during the bizarre phenomenon of the Covid-19 Pandemic.
format Theses
author Azahra, Nabila
author_facet Azahra, Nabila
author_sort Azahra, Nabila
title FINANCIAL PERFORMANCE, ECONOMIC VALUE ADDED, AND STOCK RETURN OF PHARMACEUTICAL COMPANIES
title_short FINANCIAL PERFORMANCE, ECONOMIC VALUE ADDED, AND STOCK RETURN OF PHARMACEUTICAL COMPANIES
title_full FINANCIAL PERFORMANCE, ECONOMIC VALUE ADDED, AND STOCK RETURN OF PHARMACEUTICAL COMPANIES
title_fullStr FINANCIAL PERFORMANCE, ECONOMIC VALUE ADDED, AND STOCK RETURN OF PHARMACEUTICAL COMPANIES
title_full_unstemmed FINANCIAL PERFORMANCE, ECONOMIC VALUE ADDED, AND STOCK RETURN OF PHARMACEUTICAL COMPANIES
title_sort financial performance, economic value added, and stock return of pharmaceutical companies
url https://digilib.itb.ac.id/gdl/view/63706
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