DIVERSIFICATION, PERFORMANCE, AND FIRM VALUE

Nikmah, Nikmah (2014) DIVERSIFICATION, PERFORMANCE, AND FIRM VALUE. In: "ASIA EMERGING ECONOMY TOWARD GLOBAL ECONOMIC INTEGRATION", 18-20 Oktober 2012, Fakultas Ekonomi Universitas Sriwijaya Palembang, Indonesia.

Preview

Text (Prosiding) MIICEMA 2012 1.pdf - Bibliography Available under License Creative Commons GNU GPL (Software). Download (2MB) | Preview

Abstract

The objective of this study is to examine the difference about performance and value of firm with diversified strategy and firm with focused strategy. The firm performance was measured on the following attributes: liquidity ratio (current ratio), activity ratio (total asset turnover), profitability ratio (ROA, ROE, profit margin), and solvency ratio (debt ratio). The firm value was measured by the Tobin’s Q ratio. Sample was taken based on purposive sampling method from manufactured companies listed in Indonesia Stock Exchange in the year of 2006 to 2010. The final samples consisted of 56 companies whichwere 35 firms with diversified strategy and 21 firms with focused strategy. This study used the independent sample t-test method for testing the hypotesis.This study found that there was not difference firm performance at activity ratio(total asset turnover)between firm with diversified strategy and firm with focused strategy, but liquidity ratio (current ratio), then profitability ratio that proxy with ROA, ROE, and profit margin, and solvency ratio (debt ratio) evidenced that there were differences firm performance between the firm with diversified strategy and firm with focused strategy. Firm with diversified strategy were more profitable then firms with focused strategy. As for the firms value test resulted that there was no difference between firms with diversified strategy and firms with focused strategy. It meant that diversified strategy was not significantly effect hefirmsperformance and value.

Actions (login required)

View Item