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Feny Fidyah, Afrila Eki Pradita. (2022). Factors Affecting the Value of

Companies in the Mining Sector. Journal Eduvest. Vol (2): 636-645

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Eduvest – Journal of Universal Studies

Volume 2 Number 4, April, 2022

p- ISSN 2775-3735- e-ISSN 2775-3727

FACTORS AFFECTING THE VALUE OF COMPANIES IN

THE MINING SECTOR

Feny Fidyah

, Afrila Eki Pradita

1,2

Gunadarma University, Indonesia

Email: [email protected].id,

afrila_pradita@staff.gunadarma.ac.id

ARTICLE INFO ABSTRACT

Received:

March, 26

2022

Revised:

April, 16

2022

Approved:

April, 17

2022

Losses due to the Covid-19 pandemic have a global impact on

the life of a country, including companies in all sectors. Mining

sector companies listed on the Sharia Securities List are also

affected by this pandemic and are demanding companies to

work harder for better productivity and selling points than the

previous year. This study aims to determine factors such as

company characteristics (ROA, DER, CR and size) that affect

the mining sector company value (PBV) on the Sharia Securities

List listed on the Indonesia Stock Exchange (IDX). The data used

is secondary data obtained from the website www.idx.co.id.

The research period starts from 2015 – 2020. The samples

obtained were using non-probability sampling with purposive

sampling method and the samples obtained were 8

companies. Multiple linear regression analysis and hypothesis

testing are analytical techniques used. The result of this

research is ROA has an effect on PBV. DER, CR and size partially

have no effect on PBV. Mining sector companies listed on

sharia securities should pay attention to company

characteristics such as DER, CR and size to increase company

value.

KEYWORDS

ROA, DER, CR, Size, Company Characteristics, PBV and

Company Value

This work is licensed under a Creative Commons

Attribution-ShareAlike 4.0 International

INTRODUCTION

The Covid-19 pandemic has had a negative impact on mining sector companies, not

only producing coal but also other types of mining. As shown in Figure 1 below, the price

of coal has the lowest price since the beginning of 2020 because global demand for coal is

Feny Fidyah, Afrila Eki Pradita

Factors Affecting the Value of Companies in the Mining Sector 637

greatly reduced so that the price decreases, which causes a decrease in investment in mining

companies.

Source: Directorate General of Mineral and Coal, Ministry of Energy and Mineral Resources

Graph 1. Coal Prices January – November 2020

Other countries that usually export coal from Indonesia tend to switch to using other

energy sources and reduce import activities to reduce the development of the Covid-19

pandemic in their countries.

Although the Covid-19 pandemic has given negative performance to the mining

sector, this is inversely proportional to the number of sharia shares on the Sharia Securities

List which has increased every year as well as the number of issuers in the mining sector,

as shown in Figure 1 below.

Figure 1. Number of Islamic shares in the List of Sharia Securities

Investors as shareholders fundamentally analyze the company's financial statements

and other indicators, such as company size, corporate actions, and the quality of company

313

315

321

345

351

375

381

407

408

435

457

456

Periode DES

Sharia Stock Development

Source: ojk.co.id

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638 http://eduvest.greenvest.co.id

management. Investors rely heavily on financial reports because the available data is very

valid. Analysis to assess the company is price to book value is used to assess all types of

companies because book value can be a rational measure to assess the company. In

addition, the price to book value ratio is used to compare an industrial sector that has the

same accounting standard (Yuliningsih, 2013). Firm value is the company's performance

in the form of stock prices which are formed from the purchase price and the selling price

of the capital market. This can also be interpreted as describing the public's assessment of

the company (Harmono, 2009).

Company characteristics show the characteristics inherent in corporate entities such

as company size, level of liquidity, level of leverage and level of company profitability.

Firm value is influenced by the profitability ratio as measured by Return on Assets (ROA)

because this ratio assesses the company's ability to generate profits within a certain period.

If the company shows a high level of profitability, investors will respond positively to the

company and the value of the company will increase. Leverage ratio as measured by DER

(Debt to Equity Ratio) where the company can cover the company's debt with its own

capital (Darmadji and Hendi, 2011). The company's ability to meet its short-term debt is

the liquidity ratio as measured by the current ratio (CR). Companies that have a high level

of liquidity will make the company's growth more liquid, thus increasing the value of the

company in the eyes of potential investors (Gultom, Agustina and Wijaya, 2013). The next

variable to determine the value of the company is the size of the company (size) which is

a reflection of the total assets of the company. The larger the size of the company, the

investors tend to pay attention to the company.

Many previous studies have discussed the effect of firm characteristics on firm value,

such as one of the firm's characteristic factors, namely the debt to equity ratio (DER), which

affects firm value (price to book value - PBV) (Wardjono, 2010; Chaidir, 2015). In

addition, there are research results which conclude that the debt equity to ratio has no effect

on price to book value (Putri, 2014; Hamizar, 2017). The results of this study indicate that

the effect of debt equity to ratio on price book value as firm value shows different results.

Therefore, this research is still considered necessary to see the effect of debt equity to ratio

and firm value when carried out on mining companies listed on the sharia securities list on

the Indonesia Stock Exchange.

Based on the results of different studies, the purpose of the research being tested is

how are the factors that affect the value of mining companies listed on the sharia securities

list on the Indonesia Stock Exchange (IDX) for the 2015-2020 period.

RESEARCH METHOD

This study was conducted to determine the relationship between the characteristics

of the company to the value of the company. This study uses a sample of mining sector

companies SK List of Sharia Securities Period II – 2020 which are listed on the Indonesia

Stock Exchange.

The sampling method in this research is purposive sampling. Based on the selection

made, 8 mining sector companies were obtained as research samples with the criteria

shown in table 1 below:

Feny Fidyah, Afrila Eki Pradita

Factors Affecting the Value of Companies in the Mining Sector 639

Table 1. Research Sample Collection Techniques

No.

Criteria

Total

Mining sector companies in the SK

List of Sharia Securities (DES) Period II-

2020

Mining companies earn a loss during

the 2015-2020 research period

-13

Mining companies that do not publish

complete financial statements during the

study period

-2

Mining companies that do not present

financial statements in dollars, so that the

measurement criteria are the same

-9

Number of Research Samples

Company

Total Observations (Sample X N-Years)

sample

Source : idx.co.id

This study uses 5 (five) variables consisting of Return on Assets (ROA), Debt to

Equity ratio (DER), Current Ratio (CR), Company Size (Size) and Price Book to Value

(PBV). Below is Table 2. Definition of Operational Variables.

Tabel 2. Definisi Operasional Variabel

Variab

Sub

Variable

Indicat

Formu

Sca

Free

(Xn)

Compa

Characteristic

ROA

(Return On

Asset)

(Kasmir, 2017)

Profit

before tax

Total

Assets

Rati

DER

(Debt to Equity

Ratio)

(Harahap,

2012)

Total

Amoun of

debt

Equity

Rati

(Current

Ratio)

(Riyanto,

2001)

Current

assets

Current

liabilities

Rati

Compa

ny Size (Size)

(Kasmir, 2017)

(Total Assets)

Rati

Bound

(Y)

The

value of the

company

PBV

(Price Book to

Value)

(Husnan dan

Enny, 2012)

Price

Per Share

Book

Value Per

Rati

The analytical technique used to test the hypothesis in this research is using multiple

regression analysis.

Eduvest – Journal of Universal Studies

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RESULT AND DISCUSSION

Result

Hypothesis testing in this study using multiple linear regression analysis. This

analysis is used to determine the factors that influence the value of companies in mining

companies (study: List of Sharia Securities on the IDX). The value of the results of multiple

linear regression analysis can be seen in Table 3. Then the multiple regression equation

between the variables studied is as follows:

PBV = -2.741+ 4.039 ROA

+ 0,115 CR

+ 0,617 DER

+ 0,161 SIZE

+ e

Table 3. Multiple Linear Regression Coefficient Values

Model

Unstandardized Coefficients

Standardized

Coefficients

Std.

Error

Beta

(Constan

-2,741

1,742

ROA

4,039

1,158

0,459

0,115

0,132

0,130

DER

0,617

0,431

0,208

SIZE

0,161

0,086

0,243

a. Dependent Variable: PBV

Multiple linear regression equation can be explained as follows:

1. The constant of -2.741 indicates that if all the independent variables ROA, CR, DER

and Size, are assumed to be zero, then the value of the PBV is -2.741.

2. The ROA coefficient of 4.039 indicates that if the value of the ROA variable increases

by 100%, then the PBV value increases by 403.9 units, assuming all other independent

variables are zero.

3. The CR regression coefficient of 0.115 indicates that if the CR variable increases by

100%, then the PBV increases by 11.5 units, assuming all other independent variables

are zero.

4. The DER regression coefficient of 0.617 indicates that if the DER variable increases

by 100%, then the PBV increases by 61.7 units assuming all other independent

variables are zero.

5. Size regression coefficient of 0.161 indicates that if the Size variable increases by

100%, then the PBV increases by 16.1 units assuming all other independent variables

are zero.

Next, hypothesis testing was carried out using the t test, to determine the effect of

ROA, DER, CR and Size on PBV partially. The test results can be seen in Table 4. Values

for the t-test.

The t-test basically shows how far the influence of one explanatory or independent

variable individually in explaining the variation of the dependent variable (Ghozali, 2016).

The test is carried out by looking at the t-count value and the level of significance for each

independent variable. The effect of the independent variable on the dependent variable

partially with the t test is as follows. Hypothesis:

1. H1 : ROA has an effect on PBV

2. H2 : DER has an effect on PBV

Feny Fidyah, Afrila Eki Pradita

Factors Affecting the Value of Companies in the Mining Sector 641

3. H3 : CR has an effect on PBV

4. H4 : Size affects PBV

The basis for making decisions on the t-test, namely:

1. If the significance of t 0.005, then H01, H02, H03, H04, are rejected

2. If the significance of t < 0.005, then Ha1, Ha2, Ha3, Ha4, accepted

Table 4. Values for t test

Model

Unstandardized

Coefficients

Standardized

Coefficients

Sig.

Std.

Error

Beta

(Constant)

-2,741

1,742

1,573

0,123

ROA

4,039

1,158

0,459

3,488

0,001

0,115

0,132

0,130

0,876

0,386

DER

0,617

0,431

0,208

1,433

0,159

SIZE

0,161

0,086

0,243

1,872

0,068

a. Dependent Variable: PBV

Based on Table 4 it can be concluded as follows:

1. ROA has a significant effect on PBV in mining companies on the Sharia Securities List

(DES) on the IDX. This can be seen from the significant level of 0.001 < 0.005.

2. CR does not affect the PBV of mining companies on the Sharia Securities List on the

IDX. This can be seen from the significant level of 0.386 > 0.005.

3. DER does not affect the PBV of mining companies on the Sharia Securities List on the

IDX. This can be seen from the significant level of 0.159 > 0.005.

4. Size does not affect the PBV of mining companies on the Sharia Securities List on the

IDX. This can be seen from the significant level of 0.068> 0.005.

The next hypothesis testing is the F test to see whether ROA, DER, CR and Size

simultaneously have an effect on PBV. The value of the F test can be seen in Table 5.

Table 5. F . Test Values

Model

Sum of

Squares

Mean

Square

Sig.

Regression

14,509

3,627

4,970

,002

Residual

31,382

0,730

Total

45,890

a. Dependent Variable: PBV

b. Predictors: (Constant), SIZE, DER, ROA, CR

Based on Table 5, ROA, DER, CR and Size simultaneously have a significant effect

on PBV. This is indicated by a significant value of 0.002 < 0.005.

Next is the coefficient of determination used to determine the ability of the

independent variables (ROA, DER, CR, Size) in explaining the dependent variable (PBV)

(Ghozali, 2016). The value of the coefficient of determination is between 0 and 1. If the

coefficient of determination is closer to 1, the ability to explain the independent variable to

the dependent variable is getting stronger, which means that the independent variables

provide almost all the information needed to predict the variation of the dependent variable.

The following are the results of the coefficient of determination test in Table 6.

Eduvest – Journal of Universal Studies

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Table 6. Determination Test Results

Model Summary

Model

R Square

Adjusted R

Square

Std. Error

of the

Estimate

,562

0,316

0,253

0,854287

a. Predictors: (Constant), SIZE, DER, ROA, CR

b. Dependent Variable: PBV

Based on the test results in Table 6, the value of R Square (R2) is 0.316. This value

indicates the ability of the independent variables, namely ROA, DER, CR and Size in

explaining the PBV variable, which is 31.6%. Meanwhile, 68.4% is influenced by other

independent factors and variables that are not explained in this study.

Discussion

Effect of Return on Assets (ROA) on Price to Book Value (PBV)

The test results of the return on assets variable have a significant effect on the price

to book value ratio of mining companies on the Sharia Securities List (DES) on the

Indonesia Stock Exchange. With a significant level of 0.001 < 0.005. So the results of this

study are relevant to research which concludes that ROA has a positive and significant

effect on PBV (Martini, Ni Nyoman G., Moeljadi, Djumahir and Atim Djazuli (2014),

Garmayuni (2015), Johan (2012), and Dewi and Wirajaya ( 2013).

Effect of Debt to Equity ratio (DER) on Price to Book Value (PBV)

The results of the DER variable test have no effect on the price to book value ratio

of mining companies on the Sharia Securities List (DES) on the Indonesia Stock Exchange.

The significant level is 0.159 > 0.005. So it can be concluded that some investors only want

short-term profits in the form of the difference between buying and selling shares and not

considering the company's debt to equity ratio. Investors tend to only follow trends or

events that occur in the capital market. The growth that occurs in mining sector companies

tends to be ignored but only looks at the profitability generated by the company.

The results of this study are in line with research conducted by Putri (2014), Hamizar

(2017) and Christiana and Putri (2017). This research is inversely proportional to Wardjono

(2010) and Chaidir (2015) who conclude that there is an influence between the two

variables.

Effect of Current Ratio (CR) on Price to Book Value (PBV)

The results of this study conclude that the current ratio (CR) has no effect on the price

to book value of mining companies on the sharia securities list (DES) on the Indonesia

Stock Exchange where the significant level is 0.386 > 0.005. it can be concluded that most

investors are looking for capital gains rather than company growth, an increase or decrease

in the current ratio does not attract the attention of investors to buy their shares.

This research is the same as that conducted by Selin Lumoly, Sri Murni and Victoria

(2018) and inversely proportional to the research conducted by Hasania, Sri Murni, and

Mandagie (2016) which concluded that the current ratio has an influence on price to book

value.

Feny Fidyah, Afrila Eki Pradita 
 
Factors Affecting the Value of Companies in the Mining Sector  643 
Effect of Firm Size (Size) on Price to Book Value (PBV) 
The results of this study conclude that company size does not affect the price to book 
value  of  mining companies on  the  sharia securities  list  (DES) on the Indonesia  Stock 
Exchange where the significant level is 0.068 > 0.005. So it can be concluded that investors 
do not only look at the size of the company's assets but from the name of the company and 
the policies taken by the company. 
The results of this study are the same as those conducted by Gultom, R., Agustina 
and  Wijaya,  (2013).  But  in  contrast  to  research  conducted  by  Linda  Fitriani  (2010), 
Sulistiono (2010), and Yangs Analysis (2011) which states that firm size has a positive 
effect on firm value. 
CONCLUSION 
 
Based on the hypothesis, testing the data and the discussion above to find out whether the 
factors that influence the value of mining companies  on the  sharia securities list (DES) on the 
Indonesia Stock Exchange, it can be concluded that: Return on Assets (ROA) has a significant 
effect on the value of companies measured by price to book value (PBV) on mining companies 
listed Islamic securities (DES) on the Indonesia Stock Exchange for the period 2015 – 2020. Debt 
to Equity ratio (DER) has no effect on company value as measured by price to book value (PBV) 
on mining companies  listed Islamic securities (DES) on the Indonesia Stock Exchange for the 
period 2015 – 2020. Current ratio (CR) has no effect on company value as measured by price to 
book value (PBV) on mining companies listed Islamic securities (DES) on the Stock Exchange. 
Indonesian securities for the period 2015 – 2020. The size of the company (size) has no effect on 
the value of the company as measured by price to book value (PBV) for mining companies listed 
on sharia securities (DES) on the Indonesia Stock Exchange for the period 2015 – 2020. 
 
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