Liquidity, Profitability On Firm Value: An Evidence of Transportation Company Listed at Indonesian Stock Exchange

Abstract

Transportation companies in Indonesia are one of the most important company because they are really helpful for the people in Indonesia in order to deliver people from place to place especially in the country with lots of islands. The purpose of this study was to look at the effect of liquidity, profitability on firm value in the Transportation Sub Sector in the Indonesia Stock Exchange. The population of this study is the transportation companies listed on the Indonesia Stock Exchange which are supported by 10 companies with an observation period of 2 years, namely in 2016-2017.The method used in this research is descriptive, by using the Current ratio for liquidity, Return On Equity for profitability, and price to book value for firm value. The analysis of the data is using descriptive statistics, normality test, significant test, and regression linear. The results showed that there is a significant relationship between Liquidity and Profitability on Firm Value in the Transportation Sub Sector in the Indonesia Stock Exchange seen from F count 3.594 with a significant value of 0.05 at α=10%. The result descriptive result shows that sub-sector has average liquidity of 1.1656 and profitability of 3.55%. This result indicates that transportation companies have difficulties in their ability to gain profit and are generally liquid. Thus it is recommended for companies in the transportation sub-sector to have liquidity in their operation and focus on their ability to gain profit to maximize firm value.