THE EFFECT OF FINANCIAL PERFORMANCE ON FIRM VALUE BEFORE AND AFTER THE FORMATION OF MIND ID SECTORAL HOLDING

• Main Author: Nugroho, Tomi
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/75384
• Institution: Institut Teknologi Bandung

In 2017, the Government of Indonesia established a state-owned mining holding company known as MIND ID. The sectoral holding aims to increase the company's market value creation. Company value is important because it will influence investors' decisions to invest in the company. One of the factors that can affect the value of a company is the company's financial performance. In this study, the effect of financial performance on company value before and after the formation of the holding will be sought. The variables used in measuring financial performance are profitability, liquidity, solvency, and activity ratios. The method used in conducting data analysis and processing is multivariate analysis with the structural equation modelling-partial least square method. The samples observed were PT Aneka Tambang Tbk., PT Bukit Asam Tbk., and PT Timah Tbk. with the period 2013- 2022. The results showed that financial performance before the formation of the holding as measured by activity, liquidity, and profitability had a positive and significant effect, and solvency had a positive and insignificant effect on the value of the company. Meanwhile, after the formation of the holding, financial performance measured by activity has a positive and significant effect, liquidity and profitability have a positive and insignificant effect, and solvency has a negative and insignificant effect on company value. There is a difference in the significance of the effect of financial performance with the value of the company before and after the formation of the holding.