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Research Paper | Economics & Management | Indonesia | Volume 9 Issue 2, February 2020 | Popularity: 6.8 / 10

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Analysis of Influence Ability to Pay Debt to Corporate Value with Profitability as Intervening Variables

Nurpadilah, Dian. A S Parawansa, Erlina Pakki

Abstract: NURPADILAH. Analysis Of Influence Ability To Pay Debt To Corporate Values With Profitability As Intervening: Cases In The Mining, Manufacturing, And Telecommunication Industry Lq45. (Supervised By: Dian A. S. Parawansa And Erlina Pakki) The purpose of this study is to examine the effect of debt ratios consisting of total debt ratio, debt equity ratio, and current ratio to the value of the company (price book value) through priofitability (return on assets). The research design uses quantitative research conducted on industries in LQ45, specifically mining, manufacturing, and telecommunications in the period of 2014-2018. Data analysis technique is path analysis. Direct test results of equations 1 and 2 show that negative TDR is not significant for ROA. Positive DER is not significant for ROA, negative CR is significant for ROA, negative TDR is significant for PBV, positive DER is not significant for PBV and negative CR is significant for PBV. The result of the indirect effect of the debt ratio to the value of the company through ROA show no significant effect. Profitability is therefore not able to mediate the relationship of total debt ratio, debt equity ratio, and current ratio to the value of the company.

Keywords: total debt ratio, debt equity ratio, current ratio, return on assets, price book value

Edition: Volume 9 Issue 2, February 2020

Pages: 893 - 897

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