The Effect of Economic Value Added and Profitability on Firm Value

Abstract

Firm value is a one of the representations of the company's performance. Firm value very important because it reflected the company's performance, which influenced investors' perceptions of the company. This study aimed to determine and analyze the effect of Economic Value Added (EVA) and Profitability (Return On Assets (ROA) and Return On Equity (ROE)) on Firm Value. Firm value was measured using the Price Book Value (PBV). The study used a quantitative method and was conducted in the banking sector listed on the Indonesia Stock Exchange (IDX) for the 2021-2023 period. Sampling was carried out using purposive sampling technique with the criteria of 10 companies with the highest assets so that the sample obtained was 30. Data analysis used the panel data regression analysis method. The results of this study showed that Economic Value Added (EVA) had a negative and insignificant effect on firm value. Return On Assets (ROA) and Return On Equity (ROE) partially had a positive and significant effect on firm value. Economic Value Added (EVA), Return On Assets (ROA), and Return On Equity (ROE) simultaneously had a positive and significant effect on firm value.