Abstract :
The financial performance of companies listed on the stock exchange is reflected in the value of the company. The company's financial performance can increase the value of the company. The value of the company is reflected in the share price of the company. The higher the stock price of a company, the higher the value of the company. Likewise, the higher the value of the company, the better the financial performance of a company. Financial performance in this study focuses on profitability ratios. The value of the company will increase if profitability is high, this shows the company's prospects are good so that many investors will respond or participate in investing.
The purpose of this study was to determine the effect of financial performance, capital structure and firm value on banking companies listed on the Indonesia Stock Exchange in 2015-2020. The sample of this research is the annual report and financial statements of banking companies listed in 2015 to 2020 on the IDX. Analysis using multiple linear regression, and hypothesis testing (t test and F test).
The results of the study show (1) financial performance affects firm value, (2) capital structure affects firm value (3) financial performance and capital structure affects firm value, meaning that firm value is an investor's perception of the company which is often associated with stock prices. The value of the company, which is formed through stock market indicators, is strongly influenced by investment opportunities. Investment spending gives a positive signal from investment to managers about the company's growth in the future, thereby increasing stock prices as an indicator of company value. High stock prices make the value of the company also high.
Keywords: Financial Performance, Capital Structure, Firm Value