Tobin’s Q as a Mediating Variable in the Relationship between Financial Ratios and Stock Prices: An Analysis
Abstract
Other sectors of the economy depend on Indonesia's financial industry for liquidity and loans. Therefore, studying the components that influence the value of banking stocks is interesting and important. This study investigates the mediating effect of Tobins's Q on the correlation of Price Earnings Ratio, Price to Book Value, and Earning per Share to Share Price in the Indonesian banking sector. This quantitative research uses the partial least squares-structural equation modelling (PLS-SEM) method. This study examined 43 banks listed on the Indonesia Stock Exchange (IDX) from 2019 to 2022 with a total of 172 data for 4 years. Purposive sampling was used by the researchers. Tobin's Q is a positive mediator, although it does not statistically significantly influence EPS and PER on Share Price. In addition, Tobin's Q is also a negative mediator of PBV and Share Price, but not statistically significant. This research has major implications for managerial decision-making, investor tactics, regulatory rules, and future research on stock prices and corporate management.
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References
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Najid, N. A., & Rahman, R. A. (2011). Government Ownership and Performance of Malaysian Government-Linked Companies. International Research Journal of Finance and Economics, 61(1), 1450–2887.
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Onyebuchi, O. M., Joseph, I., & Ebilaowei, P. (2022). Capital Structure and Financial Performance of Listed Pharmaceutical Enterprises Nigerian Experience. American Journal of Economics and Business Management, 5(7), 157–167.
Putri, E. A., & Suseno, G. (2024). Peran Mediasi Profitabilitas pada Pengaruh Solvabilitas terhadap Nilai Perusahaan di Sektor Perbankan Indonesia. JURNAL SYNTAX IMPERATIF: Jurnal Ilmu Sosial Dan Pendidikan, 5(1), 193–209.
Saputra, F. (2022). Analysis Effect Return on Assets (ROA), Return on Equity (ROE) and Price Earning Ratio (PER) on Stock Prices of Coal Companies in the Indonesia Stock Exchange (IDX) Period 2018-2021. Dinasti International Journal of Economics, Finance & Accounting, 3(1), 82–94.
Shiller, R. J. (1989). Do Stock Prices Move Too Much to Be Justified by Subsequent Changes in Dividends?: Reply. American Economic Review, 73(1), 236–237.
Sukmawati, F., & Garsela, I. (2016). The Effect of Return on Assets and Return on Equity to the Stock Price. Proceedings of the 2016 Global Conference on Business, Management and Entrepreneurship, 53–57. https://doi.org/10.2991/gcbme-16.2016.8
Suseno, G. (2021). ANALISIS PENGARUH DEGREE OF OPERATING LEVERAGE (DOL) DAN DEGREE OF FINANCIAL LEVERAGE (DFL) TERHADAP EARNING PER SHARE (EPS) PADA PT. AGUNG PODOMORO LAND TBK DI BURSA EFEK INDONESIA PERIODE (2010-2019). Universitas Lancang Kuning.
Talamati, M. R., & Pangemanan, S. S. (2015). THE EFFECT OF EARNINGS PER SHARE (EPS) & RETURN ON EQUITY (ROE) ON STOCK PRICE OF BANKING COMPANY LISTED IN INDONESIA STOCK EXCHANGE (IDX) 2010-2014. Journal EMBA, 3(2), 1086–1094.
Willim, A. P. (2015). Price Book Value & Tobin’s Q: Measurement Which One is Better for Corporate Governance ? European Journal of Business and Management, 7(27), 74–79.
Apriyani, A., & Aisyah F Pulungan, N. (2020). THE EFFECT OF ECONOMIC VALUE ADDED (EVA) ON PRICE TO BOOK VALUE THE ROLE OF INSTITUTIONAL OWNERSHIP IN RETAIL SECTOR COMPANIES LISTED ON THE INDONESIA STOCK EXCHANGE. Dinasti International Journal of Economics, Finance & Accounting, 1(5), 889–904. https://doi.org/10.38035/dijefa.v1i5.624
Astawa, K., & Rahayu, S. and S. M. (2019). The Effect of Intellectual Capital and Capital Adequacy on Credit Risks and Financial Performance (A Study of Commercial Banks at the Indonesia Stock Exchange ). Research Journal of Finance and Accounting, 10(10), 203–222. https://doi.org/10.7176/RJFA/10-10-22
Connelly, B. L., Certo, S. T., Ireland, R. D., & Reutzel, C. R. (2011). Signaling Theory: A Review and Assessment. Journal of Management, 37(1), 39–67. https://doi.org/10.1177/0149206310388419
Eivani, F., Seresht, D. J., & Aflatooni, A. (2021). Developing a Prediction-Based Stock Returns and Portfolio Optimization Model. Advances in Mathematical Finance and Applications, 7(3), 793–809.
Fadhilah, N. N., Kurniati, D., & Suherman, S. (2022). Firm Value Determinants: Empirical Evidence from Manufacturing Firms Listed on the Indonesia Stock Exchange. Interdisciplinary Social Studies, 1(6), 742–756. https://doi.org/10.55324/iss.v1i6.136
Fama, E. F. (1970). Efficient Capital Markets: A Review of Theory and Empirical Work. The Journal of Finance, 25(2), 383–417. https://doi.org/10.2307/2325486
Gharaibeh, A. M. O., & Qader, A. A. A. A. (2017). Factors Influencing Firm Value as Measured by the Tobin’s Q: Empirical Evidence from the Saudi Stock Exchange (TADAWUL). International Journal of Applied Business and Economic Research, 15(6), 333–358.
Ghozali, I. (2018). Aplikasi analisis multivariate dengan program IBM SPSS 25 (9th ed.). Badan Penerbit Universitas Diponegoro.
Gunadi, I. G. N. B., Putra, I. G. C., & Yuliastuti, I. A. N. (2020). The Effects of Profitabilitas and Activity Ratio Toward Firms Value With Stock Price as Intervening Variables. International Journal of Accounting & Finance in Asia Pasific, 3(1), 56–65. https://doi.org/10.32535/ijafap.v3i1.736
Gunawan, R. M. B., & Budiarjo, E. D. (2014). The Influence of Good Corporate Governance, Ownership Structure and Bank Size to the Bank Performance and Company Value in Banking Industry in Indonesia. European Journal of Business and Management, 6(24), 9–19.
Hair Jr, J. F., Matthews, L. M., Matthews, R. L., & Sarstedt, M. (2017). PLS-SEM or CB-SEM: updated guidelines on which method to use. International Journal of Multivariate Data Analysis, 1(2), 107. https://doi.org/10.1504/IJMDA.2017.087624
Hariyani, D. S., Ratnawati, T., & Rahmiyati, N. (2021). The Effects of Macroeconomics, Dividend Policy, Good Financial Governance on Corporate Value: Moderation of CSRD. International Journal of Scientific and Research Publications (IJSRP), 11(4), 303–309. https://doi.org/10.29322/IJSRP.11.04.2021.p11240
Ichsani, S., Zaenudin, A., Izlia, N., Damayanti, G., Novia, T., Vela, P., & Via, A. (2021). The Effect of Financial Ratio on Firm Value: Empirical Evidence from Listed Firms in the IDX30 Index. The Journal of Asian Finance, Economics and Business, 8(6), 103–112. https://doi.org/https://doi.org/10.13106/jafeb.2021.vol8.no6.0103
Kurlat, P., & Scheuer, F. (2021). Signalling to Experts. The Review of Economic Studies, 88(2), 800–850. https://doi.org/10.1093/restud/rdaa068
Malkiel, B. G. (2003). The Efficient Market Hypothesis and Its Critics. Journal of Economic Perspectives, 17(1), 59–82. https://doi.org/10.1257/089533003321164958
Marc, T. F. W., Suciwati, D. P., & Karma, I. G. M. (2022). The Effect of Price Earning Ratio, Firm Size, and Corporate Social Responsibility on Firm Value (Empirical Study on Pharmaceutical Sub-Sector Companies Listed on The Indonesia Stock Exchange 2016 – 2020 Period). Journal of Applied Sciences in Accounting, Finance, and Tax, 5(1), 20–27. https://doi.org/10.31940/jasafint.v5i1.20-27
Najid, N. A., & Rahman, R. A. (2011). Government Ownership and Performance of Malaysian Government-Linked Companies. International Research Journal of Finance and Economics, 61(1), 1450–2887.
Oktaviyani, Y., & Mulyana, B. (2022). The Effect of Financial Performance, Firm Size, Corporate Social Responsibility and Firm Value on Plantation Sub-Sector Issuer. Science Journal of Business and Management, 10(3), 138–149.
Onyebuchi, O. M., Joseph, I., & Ebilaowei, P. (2022). Capital Structure and Financial Performance of Listed Pharmaceutical Enterprises Nigerian Experience. American Journal of Economics and Business Management, 5(7), 157–167.
Putri, E. A., & Suseno, G. (2024). Peran Mediasi Profitabilitas pada Pengaruh Solvabilitas terhadap Nilai Perusahaan di Sektor Perbankan Indonesia. JURNAL SYNTAX IMPERATIF: Jurnal Ilmu Sosial Dan Pendidikan, 5(1), 193–209.
Saputra, F. (2022). Analysis Effect Return on Assets (ROA), Return on Equity (ROE) and Price Earning Ratio (PER) on Stock Prices of Coal Companies in the Indonesia Stock Exchange (IDX) Period 2018-2021. Dinasti International Journal of Economics, Finance & Accounting, 3(1), 82–94.
Shiller, R. J. (1989). Do Stock Prices Move Too Much to Be Justified by Subsequent Changes in Dividends?: Reply. American Economic Review, 73(1), 236–237.
Sukmawati, F., & Garsela, I. (2016). The Effect of Return on Assets and Return on Equity to the Stock Price. Proceedings of the 2016 Global Conference on Business, Management and Entrepreneurship, 53–57. https://doi.org/10.2991/gcbme-16.2016.8
Suseno, G. (2021). ANALISIS PENGARUH DEGREE OF OPERATING LEVERAGE (DOL) DAN DEGREE OF FINANCIAL LEVERAGE (DFL) TERHADAP EARNING PER SHARE (EPS) PADA PT. AGUNG PODOMORO LAND TBK DI BURSA EFEK INDONESIA PERIODE (2010-2019). Universitas Lancang Kuning.
Talamati, M. R., & Pangemanan, S. S. (2015). THE EFFECT OF EARNINGS PER SHARE (EPS) & RETURN ON EQUITY (ROE) ON STOCK PRICE OF BANKING COMPANY LISTED IN INDONESIA STOCK EXCHANGE (IDX) 2010-2014. Journal EMBA, 3(2), 1086–1094.
Willim, A. P. (2015). Price Book Value & Tobin’s Q: Measurement Which One is Better for Corporate Governance ? European Journal of Business and Management, 7(27), 74–79.
Published
2024-05-27
How to Cite
SUSENO, Giri et al.
Tobin’s Q as a Mediating Variable in the Relationship between Financial Ratios and Stock Prices: An Analysis.
E-Jurnal Akuntansi, [S.l.], v. 34, n. 5, may 2024.
ISSN 2302-8556.
Available at: <https://ojs.unud.ac.id/index.php/akuntansi/article/view/113232>. Date accessed: 14 nov. 2024.
doi: https://doi.org/10.24843/EJA.2024.v34.i05.p01.
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