Analysis of Current Ratio, Net Profit Margin, and Good Corporate Governance against Company Value

Abstract

Dedi Mulyadi, Sihabudin, Obsatar Sinaga.

The purpose of the study was to analyze the effect of Current Ratio, Net Profit Margin, and Good Corporate Governance on Company Value (Case Study on Infrastructure, Utilities, and Transportation Companies Listed on the Indonesia Stock Exchange).
The research method used in this research is descriptive and verification methods, because of the variables that will be examined for their relationship and the aim is to present a structured, factual, and accurate picture of the facts and relationships between the variables studied, namely the influence of Current Ratio, Net Profit Margin, and Good Corporate Governance Against Corporate Value (Case Study on Infrastructure, Utilities, and Transportation Companies Listed on the Indonesia Stock Exchange).
The study was conducted on Infrastructure, Utilities, and Transportation Sector Companies that are Listed on the Indonesia Stock Exchange with a total sample of 5 companies.
The results showed that partially Current Ratio (CR) had a positive effect on increasing company value, Net Profit Margin (NPM) had an effect on increasing company value, Good Corporate Governance (GCG) had an effect on increasing company value. Simultaneously the current ratio, net profit margin, and good corporate governance significantly influence the value of the company. The coefficient of determination (Adjusted R2) shows that the contribution given by the variable of the current ratio, net profit margin, and good corporate governance to the value of the company is 96.2% while the remaining 3.8% is influenced by other factors not examined. The correlation coefficient shows that the correlation between the variables of the current ratio, net profit margin, and good corporate governance with the value of the company is positive 0.981. Correlation of 0.981 proves that the relationship between variables of current ratio, net profit margin, and good corporate governance with firm value is very strong.