Financial Performance Evaluation: The Role of ROA and ROE in Increase Company Value

Siti Nurjanah, Steven Natanael Wijaya, Acep Komara, Moh Yudi Mahadianto

Abstract


This research aims to evaluate the financial performance of companies that go public in the banking sector by prioritizing the role of profitability variables in determining the value of the company. The indicators used are ROA and ROE which are important indicators used to measure the level of profitability and efficiency of a company in managing its assets and equity. In this study, quantitative data was obtained from the financial statements of several banks listed on the Indonesia Stock Exchange (IDX) in a certain period. To test the relationship between Return on Assets (ROA), Return on Equity (ROE), and company value, multiple regression analysis was used. The results show that ROA has a significant effect on company value, while ROE does not show a significant influence. These findings emphasize the importance of the role of banking management in optimizing ROA to increase the company's value in the eyes of investors.

Keywords


Keywords: Return on Assets (ROA), Return on Equity (ROE), Company Value, Economic Uncertainty

Full Text:

PDF

References


Adnyana, I. M. (2020). MANAJEMEN INVESTASI DAN PORTOFOLIO (M. M. Melati, S.E. (ed.)). Lembaga Penerbitan Universitas Nasional (LPU-UNAS). http://repository.unas.ac.id/3770/1/BUKU IINVESTASI REVISI 9 OK.20.pdf

Akbar, J. S. (2021). The Effect Of Return On Assets Snd Return On Equity On Price To Book Value On Banking Companies Listed On The Indonesia Stock Exchange. International Journal of Economics, Business and Accounting Research (IJEBAR), 5(2), 1–23. http://www.jurnal.stie-aas/ijebar

Anggraeni Puspitarini, A., & Tati Fitria, B. (2023). The Effect of Return on Assets (ROA) and Debt to Equity (DER) on Firm Value (Study of One of The Selected Bank Companies on the IDX). Jurnal Ekonomi, Bisnis & Entrepreneurship, 17(October), 323–333.

Brigham, E. F., & Joel F. Houston. (2020). Dasar-dasar Manajemen Keuangan (Edisi 14,).

Gumanti, T. (2011). Manajemen Investasi. Mitra Wacana Media.

Halimu, M. M., Rusman, L., Yadasang, R. M., & Umar. (2024).

Financial Performance Analysis Against Profitability Ratios at PT Astra Internasional Tbk. 11(November), 223–227.

Handayani, N., Asyikin, J., Ernawati, S., & Boedi, S. (2023). Volume 20 Issue 2 ( 2023 ) Pages 233-242 KINERJA : Jurnal Ekonomi dan

Manajemen Analisis pengaruh kinerja keuangan terhadap nilai perusahaan perbankan indonesia indonesian banking. 20(2), 233–242.

Mahadianto, M. Y., Hadiyati, S. N., & Soeparmo, N. N. F. (2020). Return on Equity , Asset Growth , Firm Size and Debt Equity Ratio of the Real Estate and Property Sub Sector Companies Listed on Indonesia Stock Exchange Period 2014-2018. Asian Journal of Accounting and Finance, 2(3), 43–57.

Maryani, T., & Zakaria, H. M. (2020). THE EFFECT OF ROA, ROE, DER ON STOCK PRICES OF COMPANIES INDEXED IN JAKARTA ISLAMIC INDEX DURING 2016-2019 PERIOD. Jurnal Ekonomi Syariah Teori Dan Terapan, 7(10), 1903. https://doi.org/10.20473/vol7iss202010pp1903-1912

Natalia, T. (2024). Saham Bank RI Ambruk Karena Konflik Iran-Israel, Kinerjanya Masih OK? CNBC Indonesia. https://www.cnbcindonesia.com/research/20240416155913-128-530743/saham-bank-ri-ambruk-karena-konflik-iran-israel-kinerjanya-masih-ok

Nurjanah, Y., & Prasetyo, D. M. (2024). Analysis Of The Use Of Return On Asset, Return On Equity, And Economic Value Added In Assessing Company Financial Performance. Jurnal Ilmiah Akuntansi Kesatuan, 12(2), 321–332. https://doi.org/10.37641/jiakes.v12i2.2055

Oktaviani, D., Satriansyah, A., & Widianingrum, E. (2024). The Effect of Profitability, Company Size and Leverage on Company Value. Jurnal Ilmiah Akuntansi Kesatuan, 12(2), 207–218. https://doi.org/10.37641/jiakes.v12i2.2504

Panjaitan, I. V., & Supriyati, D. (2023). The Effect of Profitability and Leverage on Firm Value with Firm Size as a Moderating Variable. Research of Finance and Banking, 1(1), 34–46. https://doi.org/10.58777/rfb.v1i1.34

Putri, V., & Sari, M. M. (2024). Analysis of Liquidity Ratio, Profitability Ratio and Solvency Ratio as a Tool in Measuring Financial Performance in PT Bank Mandiri (Persero) Tbk. Journal of Community Research and Service, 8(2). https://doi.org/10.24114/jcrs.v8i2.63057

Rakhman, F., Tilawatijariah, S., & Susilawati. (2023). Bank Health Analysis with RGEC Method Panin Dubai Syariah Bank Faisal. International Journal of Business, Economics and Social Development Vol., 4(2), 64–71.

Sari, O. D. S., & Hwihanus. (2023). Analisis Pengaruh Ukuran Perusahaan, Struktur Modal dan Kinerja Keuangan Terhadap Nilai Perusahaan pada Perusahaan Perbankan yang Terdaftar di Bursa Efek Indonesia Tahun 2019-2021. Jurnal Ekonomi Dan Bisnis Digital, 1(2), 287–297. https://jurnal.ittc.web.id/index.php/jebd/index

Sekenda, M. juva dyan. (2023). Analisis Rasio Keuangan Perusahaan (Financial Analysis Ratio). Mekari Jurnal Editorial. https://www.jurnal.id/id/blog/rumus-rasio-keuangan-untuk-analisis-rasio-keuangan-perusahaan/

Simanullang, C. D., Edward, Y. R., Ginting, R. R., & Simorangkir, E. N. (2021). The Effect of Return On Assets (ROA) and Return On Equity (ROE) On Company Value With Capital Structure As Moderating Variables In Banking Companies Listed On The Indonesia Stock Exchange. International Journal of Business, Economics and Law, 24(6), 129–134. www.idx.co.id

Talunohi, D., & Bertuah, E. (2022). Profitability As the Main Determining Factor of the Firm Value. Berkala Akuntansi Dan Keuangan Indonesia, 7(1), 48–63. https://doi.org/10.20473/baki.v7i1.29961

Tantra, A. R., Jayanti, F. D., Ani, D. A., & Indarto, B. A. (2022). The Effect of ROA, ROE and EPS on Company Value (On construction and Building Sector Companies). The 1st Virtual International Conference on Economics, Law and Humanities, 1(1), 88–98.

Tjahjadi, E., & Sitorus, R. R. (2024). Effect of asset quality , rentability , and liquidity on the book value of bank companies listed on the IDX in 2015-2020. 10(4), 458–466. https://doi.org/https://doi.org/10.29210/020243260

Willie, M. M. (2024). Population and Target Population in Research Methodology. Golden Ratio of Social Science and Education, 4(1), 75–79. https://doi.org/10.52970/grsse.v4i1.405




DOI: https://doi.org/10.46336/ijbesd.v6i2.916

Refbacks

  • There are currently no refbacks.


Copyright (c) 2025 International Journal of Business, Economics, and Social Development

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

Published By: 

IJBESD: Jalan Riung Ampuh No. 3, Riung Bandung, Kota Bandung 40295, Jawa Barat, Indonesia


IJBESD Indexed By:

width=width=width=width= width= width= width= 

 

Creative Commons License This work is licensed under a Creative Commons Attribution 4.0 International License.