The influence of return on assets and return on equity on company value asset
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Aug 3, 2025
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Abstract
This study aims to analyze the effect of Return on Assets and Return on Equity on firm value in automotive sector issuers listed on the Indonesia Stock Exchange during the 2020–2024 period. Profitability is viewed as a fundamental factor influencing market valuation and investor confidence, particularly in the automotive sector, which experienced significant pressure during the COVID-19 pandemic and the challenges of post-pandemic economic recovery. The research method employed a quantitative approach using secondary data in the form of financial reports and annual stock prices. The sample was determined through purposive sampling of automotive companies consistently listed on the IDX throughout the study period. Firm value was measured by the Price-to-Book Value (PBV) ratio, while the independent variables were ROA and ROE. Data analysis was performed using multiple linear regression with the classical assumption test to ensure model sphericity.The results of the hypothesis testing indicate that ROA and ROE simultaneously have a significant effect on firm value (p < 0.05). Partially, ROA has a positive and significant effect, indicating that efficient asset utilization directly increases firm value. Meanwhile, ROE also had a positive effect, but with a lower level of significance, indicating that return on equity also supports increased firm value, although it does not influence ROA.
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How to Cite
Cahya, K., Yusuf, F. A., & Kenedi, K. (2025). The influence of return on assets and return on equity on company value asset . Enrichment : Journal of Management, 15(3), 244-255. https://doi.org/10.35335/enrichment.v15i3.2319
References
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Eka Puspita Sari, & Ferry Santoso. (2024). Pengaruh Return on Asset Dan Debt To Equity Ratio Terhadap Nilai Perusahaan Pada Perusahaan Sub Sektor Property Dan Real Estate Yang Terdaftar Di Bursa Efek Indonesia Tahun 2020-2022. Seminar Nasional Pariwisata Dan Kewirausahaan (SNPK), 3(April), 542–550. https://doi.org/10.36441/snpk.vol3.2024.270
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Priem, R., & Gabellone, A. (2024). The impact of a firm’s ESG score on its cost of capital: can a high ESG score serve as a substitute for a weaker legal environment. Sustainability Accounting, Management and Policy Journal, 15(3), 676–703. https://doi.org/10.1108/SAMPJ-05-2023-0254
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Sari, A. K., & Elizabeth, S. M. (2024). Pengaruh ROE Dan CR Terhadap Return Saham Indeks LQ45. 3rd MDP Student Conference (MSC), 509–515.
Sari, F. D. S., & Nasution, R. (2024). Pengaruh Return on Equity (ROE), Debt to Equity Ratio (DER), dan Current Ratio (CR) terhadap Return Saham pada Perusahaan Subsektor Pertambangan Batu Bara Periode 2016-2022. Jurnal Ilmiah Wahana Pendidikan, 10(4), 297–307. https://doi.org/10.5281/zenodo.10516470
Sunzenauer, P. (2024). How Sustainable Is Private Equity? Unlocking the Impact of Private Equity on Asset-Level Sustainability: An Empirical Investigation. Junior Management Science, 9(1), 1100–1122.
Tarvainen, S. (2021). The relationship between environmental sustainability and cost of capital. https://lutpub.lut.fi/handle/10024/163309
Yamin Antt Zaw. (2022). Batch april, 2022. Customer Satisfaction and Repurchase Intention on Foodpanda.
Zakharkina, L., & Abramchuk, M. (2018). the Correctness of the Capm-Model Application in the Ukrainian Reality in Terms of Investors Financial Security. Baltic Journal of Economic Studies, 4(1), 163–168. https://doi.org/10.30525/2256-0742/2018-4-1-163-168
Zhang, G., & Bi, S. (2023). Inhibition or promotion: the impact of carbon emission trading on market structure: evidence from China. Frontiers in Energy Research, 11(October), 1–19. https://doi.org/10.3389/fenrg.2023.1238416
Anggraeni, P., Afriyani, R., & Setiaji, W. R. (2023). 2218-Article Text-7206-1-10-20231017. 1(4).
Arrigo, A. A. (2021). The impact of Sustainability on the Cost of Equity capital of business firms. 152. https://www.politesi.polimi.it/bitstream/10589/179412/3/2021_10_Arrigo.pdf
Bian, Y., Gao, H., Wang, R., & Xiong, X. (2023). Sustainable development for private equity: Integrating environment, social, and governance factors into partnership valuation. Business Strategy and the Environment, 32(6), 3359–3370. https://doi.org/10.1002/bse.3304
Chen, Y., & Yue, J. (2022). ESG practices and the cost of capital : Evidence from CA100 + companies. 1–75.
Conference, N., Perspectives, E., & Dated, T. (2023). National Conference on “ Emerging Perspectives & Challenges in Commerce & Management ” Organized by Bharata Mata College, Thrikkakara Dated: 20/02/2023.
Economics, S. F., & Spiering, F. E. (2023). Environmental effects on shareholder value through oil and gas divestitures following the Paris Agreement. March.
EIKV ‐ Schriftenreihe zum Wissens ‐ und Wertemanagement ESG in Private Equity and other alternative asset classes : What the industry has accomplished so far regarding Jens Hoellermann. (2020).
Eka Puspita Sari, & Ferry Santoso. (2024). Pengaruh Return on Asset Dan Debt To Equity Ratio Terhadap Nilai Perusahaan Pada Perusahaan Sub Sektor Property Dan Real Estate Yang Terdaftar Di Bursa Efek Indonesia Tahun 2020-2022. Seminar Nasional Pariwisata Dan Kewirausahaan (SNPK), 3(April), 542–550. https://doi.org/10.36441/snpk.vol3.2024.270
Grinspoon, S. K., Fitch, K. V., Zanni, M. V., Fichtenbaum, C. J., Umbleja, T., Aberg, J. A., Overton, E. T., Malvestutto, C. D., Bloomfield, G. S., Currier, J. S., Martinez, E., Roa, J. C., Diggs, M. R., Fulda, E. S., Paradis, K., Wiviott, S. D., Foldyna, B., Looby, S. E., Desvigne-Nickens, P., … Douglas, P. S. (2023). Pitavastatin to Prevent Cardiovascular Disease in HIV Infection. New England Journal of Medicine, 389(8), 687–699. https://doi.org/10.1056/nejmoa2304146
Hoi Hin, L., & Liu, M. (2023). The Impact of ESG Scores on Corporate Performance - A-Share Banks and Securities Firms. SHS Web of Conferences, 163, 02029. https://doi.org/10.1051/shsconf/202316302029
Indrawan, B., & Kaniawati Dewi, R. (2020). Pengaruh Net Interest Margin (NIM) Terhadap Return on Asset (ROA) Pada PT Bank Pembangunan Daerah Jawa Barat Dan Banten Tbk Periode 2013-2017. Jurnal E-Bis (Ekonomi-Bisnis), 4(1), 78–87. https://doi.org/10.37339/e-bis.v4i1.239
Kusjono, G., & Aryanti, F. (2021). Pengaruh Return On Asset Dan Earning Per Share Terhadap Harga Saham Pada Pt Bank Central Asia Tbk Periode 2010-2019. Jurnal Disrupsi Bisnis, 4(6), 541. https://doi.org/10.32493/drb.v4i6.15252
Nair, A., & Prajapati, N. (2025). GAP iNTERDISCIPLINARITIES FINANCIAL PERFORMANCE ANALYSIS OF SELECT LISTED ELECTRIC VEHICLE MANUFACTURERS IN INDIA GAP iNTERDISCIPLINARITIES. March, 1–10.
Neuenroth, K., & Zureck, A. (n.d.). The Influence of ESG Ratings on the Performance of Listed Companies in Germany during Crisis Katharina Neuenroth, Alexander Zureck.
Nurapiah, N., Rukhyati, R., Qosim, N., & Latoki, L. (2024). Pengaruh Return On Asset (ROA),Return On Equity (ROE),Return On Investment(ROI), danEarning Per Share (EPS)Terhadap Nilai Perusahaan pada industri Otomotif dan Komponennya yang tercatat di BEI. Jurnal Sinar Manajemen, 11(2), 114–126.
Priem, R., & Gabellone, A. (2024). The impact of a firm’s ESG score on its cost of capital: can a high ESG score serve as a substitute for a weaker legal environment. Sustainability Accounting, Management and Policy Journal, 15(3), 676–703. https://doi.org/10.1108/SAMPJ-05-2023-0254
Robin, D., & Lam, A. (2025). Monetary Policy , Carbon Transition Risk , and Firm Valuation. 1–72.
Sari, A. K., & Elizabeth, S. M. (2024). Pengaruh ROE Dan CR Terhadap Return Saham Indeks LQ45. 3rd MDP Student Conference (MSC), 509–515.
Sari, F. D. S., & Nasution, R. (2024). Pengaruh Return on Equity (ROE), Debt to Equity Ratio (DER), dan Current Ratio (CR) terhadap Return Saham pada Perusahaan Subsektor Pertambangan Batu Bara Periode 2016-2022. Jurnal Ilmiah Wahana Pendidikan, 10(4), 297–307. https://doi.org/10.5281/zenodo.10516470
Sunzenauer, P. (2024). How Sustainable Is Private Equity? Unlocking the Impact of Private Equity on Asset-Level Sustainability: An Empirical Investigation. Junior Management Science, 9(1), 1100–1122.
Tarvainen, S. (2021). The relationship between environmental sustainability and cost of capital. https://lutpub.lut.fi/handle/10024/163309
Yamin Antt Zaw. (2022). Batch april, 2022. Customer Satisfaction and Repurchase Intention on Foodpanda.
Zakharkina, L., & Abramchuk, M. (2018). the Correctness of the Capm-Model Application in the Ukrainian Reality in Terms of Investors Financial Security. Baltic Journal of Economic Studies, 4(1), 163–168. https://doi.org/10.30525/2256-0742/2018-4-1-163-168
Zhang, G., & Bi, S. (2023). Inhibition or promotion: the impact of carbon emission trading on market structure: evidence from China. Frontiers in Energy Research, 11(October), 1–19. https://doi.org/10.3389/fenrg.2023.1238416