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JoSS:

Journal of Social Science

THE EFFECT OF RETURN ON ASSET (ROA) AND DIVIDEND

POLICY ON THE VALUE OF MANUFACTURING

COMPANIES

Nunuk Novianti,

Indra Wijaya,

Ani Febianingsih

123

Universitas Bina Insani Indonesia

nunuknovianti@binainsani.ac.id

KEYWORDS

Return on Assets,

Dividend Policy,

Firm Value

ARTICLE INFO

Accepted:

11 October 2022

Revised:

12 October 2022

Approved:

13 October 2022

ABSTRACT

The purpose of this research is to know how much influence of Return

on Assets (ROA) and Dividend Policy to Firm Value partially on

Manufacturing Companies. The method of data collection is through the

population data of manufacturing companies for the period 2017 to

2021. The data is taken through the official website of the Indonesia

Stock Exchange (www.idx.co.id). The total population was found to be

167 listed companies. The samples of companies used in this study are

twenty-seven companies that have passed the criteria that have been

determined in purposive sampling. In this study, the data used is

secondary data. To obtain secondary data, it is taken from financial

reports, annual reports and sustainability reports of each manufacturing

company listed on the Indonesia Stock Exchange. Data processing using

IBM SPSS 25 application

INTRODUCTION

The company as one of the institutions in the form of an organization that is operated with the aim

of providing goods or services for the community, and in order to get the maximum profit. Another

purpose of establishing a company is to maximize the value of the company which is reflected in its

share price in the general public. For companies that are able to keep their company value high, they

can maintain their business continuity because of the interest of investors to continue to invest their

capital (Putri, 2018). Prasetyorini in Hery 2017:5 reveals that if the company's shares are to be sold, the

value of the company is the price investors are willing to pay. If the company's stock price increases, of

course, the value of the company will have a direct impact on the prosperity of shareholders.

There is one way to measure the value of the company that is by measuring the performance of the

company. To measure the company's financial performance usually use financial ratio analysis(Sabrina,

2020). Company performance is an important factor to obtain information whether the company has

developed or not or has actually decreased (Erkanawati, 2018)(Hansen & Mowen, 2007)The higher the

financial performance of a company which is proxied by financial ratios, the higher the value of the

company. Before the financial statements are broadcast to the general public, the company has analyzed

its own financial statements using financial ratios to find out whether the company's financial

performance is good or bad (Purnomo, Sriwidodo, & Wibowo, 2018). Through the ratio figures used to

measure financial performance, it shows whether the company is successful in managing its assets and

capital to maximize the value of the company (MOZZATIAZ, 2014).

According todividend policy has no effect on firm value, these results indicate that the level of

dividends distributed to shareholders is not related to the high and low value of the company This result

is consistent with irrelevant dividend theory which states that there is a relationship between dividend

Volume 1 Number 2, October, 2022

p- ISSN 2963-1866- e-ISSN 2963-8909

Vol 1, No 2 October, 2022

The Effect Of Return On Asset (Roa) And Dividend Policy On

The Value Of Manufacturing Companies

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policy and firm value The purpose of this study is to determine whether Return On Assets (ROA) and

Dividend Policy have an effect on the value of manufacturing companies(Oktapriana, Nurdiniah, &

Diyani, 2022). The independent variables in this study are Return On Assets (ROA) and Dividend

Policy, while the dependent variable is the company value projected through stock prices and inversely

proportional to book value.this study, (Ismail & Yusuf, 2021) moderating variables will also be given

that can strengthen or weaken the influence of the independent variable on the dependent variable.

METHOD RESEARCH

The type of research used in this research is descriptive quantitative(Fitri & Romli, 2020).

According to Sari (2018) descriptive research aims to describe, summarize various conditions, various

situations or various variables that arise in the community that is the object of the research. Quantitative

data are usually summed up with numbers(Chasanah, 2018). The population of the data used is

manufacturing companies for the period 2017 to 2021(Nofrita, 2013). The data is taken through the

official website of the Indonesia Stock Exchange (www.idx.co.id). The total population was found to

be 167 company issuers(MUBARAQ, n.d.). The technique used in this research is purposive

sampling(Adeliani & Roosdiana, 2022). The total population was found to be 284 listed companies.

Samples will be taken by purposive sampling method(Erkanawati, 2018). In this study, the data used is

secondary data. To obtain secondary data, it is taken from financial reports, annual reports and

sustainability reports of each manufacturing company listed on the Indonesia Stock Exchange. This

study examines whether there is an effect between Return on Assets (X1) and Dividend Policy (X2) on

firm value or Price to Book Value (Y) in manufacturing companies listed on the Indonesia Stock

Exchange (IDX)(Purnomo et al., 2018).

Variable Measurement

Samples will be taken by purposive sampling method(Nurlan, 2019). In this study, the data used

is secondary data. To obtain secondary data, it is taken from financial reports, annual reports and

sustainability reports of each manufacturing company listed on the Indonesia Stock Exchange(Amalia,

Gunistiyo, & Utami, 2017).

The data is processed in this study using the SPSS 25 statistical application(Novita, Mardani, &

Wahono, 2019). Descriptive statistics are used to explain or describe various characteristics of the data

and analyze a statistic of research results but are not used to make broader conclusions(Wibisono, 2003).

This is in accordance with the statement expressed by Sugiyono (2017), namely descriptive statistics

are statistics used to analyze data by describing or describing the data that has been collected as it is

without intending to make conclusions that apply to the public or generalizations. In the descriptive

statistics of this study, the data is processed and presented based on the period and characteristics of the

data. The results of processing and presenting the data are also compared to help understand the effect

of the independent variables on the dependent variable(Wahyuni, Alimuddin, Habbe, & Mediaty, 2020).

The descriptive statistics presented include the maximum, minimum, average, standard deviation,

number, and proportion values grouped by variables.

RESULT AND DISCUSSION

A. Hypothesis Testing and Discussion

From the results of the Descriptive Statistics test, in general, the ROA, DPO, and PBV

variables are not too far apart and the results of the classical assumption test show that this

study meets the test requirements so that research conclusions can be drawn.

Table 1. Descriptive Statistical Test Results

ROA

DPO

PBV

Valid

120

The Effect Of Return On Asset (Roa) And Dividend Policy On

The Value Of Manufacturing Companies

Vol 1, No 2 October,2022

Nunuk Novianti,Indra Wijaya,Ani Febianingsih |

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Missin

Mean

,09368792

,46751833

2,81733333

Std. Error of Mean

,005870203

,026418431

,219934728

Median

,07530000

,42965000

2,16500000

Mode

,053650

1,000000

1,100000

Std. Deviation

,064304850

,289399410

2,409264239

Variance

,004

,084

5,805

Range

,300760

,999600

15,900000

Minimum

,009120

,000400

,260000

Maximum

,309880

1,000000

16,160000

a. Multiple modes exist. The smallest value is shown

Source: Results of Data Management (2022)

Figure 1. Plot Of Regression Normality Test

Sumber : Hasil Pengelolaam Data (2022)

Vol 1, No 2 October, 2022

The Effect Of Return On Asset (Roa) And Dividend Policy On

The Value Of Manufacturing Companies

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Table 2. Multicollinearity Test

Source: Results of Data Management (2022)

Gambar 2.

Uji Heterokesdastisitas Grafik Scatterplot

Source: Results of Data Management (2022)

Table 3.

F Test Results (Model Feasibility Test)

ANOVA

Model

Sum of Squares

Mean Square

Sig.

Regression

363,008

181,504

64,796

,000

Residual

327,734

117

2,801

Total

690,742

119

Source: Results of Data

Table 4. Results of the Coefficient of Determination

Model

Unstandardized

Coefficients

Standardized

Coefficients

Sig.

Collinearity

Statistics

Std. Error

Beta

Tolerance

VIF

(Constant)

-,093

,342

-,272

,786

The Effect Of Return On Asset (Roa) And Dividend Policy On

The Value Of Manufacturing Companies

Vol 1, No 2 October,2022

Nunuk Novianti,Indra Wijaya,Ani Febianingsih |

https://joss.al-makkipublisher.com/index.php/js

ROA

25,894

2,429

,691

10,659

,000

,965

1,037

DPO

1,036

,540

,124

1,920

,057

,965

1,037

Source: Results of Data Management (2022)

The results of multiple analysis show that the Return On Assets and Dividend Pay Out variables

have a joint effect on the Price Book Value of manufacturing stocks(Murni & Sabijono, 2018). The

variability of Return On Assets and Dividend Payout of 52.6% has an effect on Price Book Value, while

the remaining 47.4% is influenced by other variables not examined in this study.

A. The Effect of Return On Assets on Firm Value

H1 The Return On Assets variable has a very positive effect on the Price Book Value variable

where an increase of 1 unit of Return On Assets will increase the Price Book Value of manufacturing

companies by 25.894 units(Mudjijah, Khalid, & Astuti, 2019). Of course, this is a variable that can be

used as a guide for investors that the increase in Return On Assets in each period will increase the

calibration of its Price Book Value where the increase in stock prices is very profitable for

investors(RIZQI, 2019). Investors who want to avoid the downturn in their investments should always

evaluate the value of Return On Assets as a signal of future stock price increases(Derek, Tommy, &

Baramuli, 2017).

B. The Effect of Dividend Policy on Firm Value

H2 Dividend Payout variable has no significant effect on Price Book Value of manufacturing

stocks. There is a theory which states that dividends are a signal that the company still exists today and

is able to share profits for investors(Ardimas & Wardoyo, 2015). There is also a theory which states

that it is better to pay a little dividend than not to distribute it at all(Listyaningsih, 2020). But apparently

these two things do not apply in manufacturing stocks. The results showed that the variable(Latifah &

Luhur, 2017).

Dividend Payout has no effect on Price Book Value, which means it is not related to the price

or book value of the company, but Dividend Payout may be meaningful for investors who want

dividends to be distributed regularly, rather than expecting capital gains that cannot necessarily be

obtained(Khasanah & Aryati, 2019).

The Price Book Value variable can indicate whether the price of shares outstanding in the

market is cheap or high compared to the book value(Munthe, 2018). Investors generally want stocks

with a Price Book Value that is not too high so that calibration increases can occur in the future(Kharima

& Zulfiati, 2020). Price Book Value that is too high indicates the saturation of the stock price compared

to the book value or too high demand or market confidence compared to the book value which has a

risk of falling share price values in the future(Fitriana, 2022). In this study Price Book Value is only

influenced by the value of Return on Assets(Dewi, Kamaliah, & Silfi, 2019).

CONCLUSION

From the results of research that has been carried out by researchers, the researchers can conclude

that: The variability of Price Book Value of 52.6% is influenced by the variability of the Return On

Assets and Dividend Policy factors, partially Return On Assets has an effect on Price Book Value while

the Dividend Policy has no effect.Researchers can provide recommendations as follows: Research

needs to be done in longer term to evaluate banking performance and the macroeconomic cycle on

credit growth rates. Research can be modified by using certain variables as moderating variables, for

example, the rate of return on the JCI.

Vol 1, No 2 October, 2022

The Effect Of Return On Asset (Roa) And Dividend Policy On

The Value Of Manufacturing Companies

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