The Effect of Asset Use Activities on Capital Structure, Business Risk, Financial Performance and Corporate Value (Study of Manufacturing Industry Companies in the Indonesia Stock Exchange)

Abstract

This study aims to examine and explain the effect of the asset usage activities on the capital structure, business risk, financial performance and corporate value. Test and explain the effect of capital structure on the business risk, financial performance and corporate value. Test and explain the effect of the business risk on the financial performance and corporate value. Test and explain the effect of the financial performance on corporate value. Analysis techniques, using the generalized structured component analysis (GSCA). Data sampled 84 companies listed in Indonesia Stock Exchange in 2010 - 2015.The findings of this study is the asset usage activities has a significant negative effect on capital structure and a significant negative effect on business risk. The asset usage activities has a significant positive effect on financial performance and corporate value. The capital structure has a significant positive effect on business risk. The capital structure has a significant negative effect on financial performance, and is significantly positive to corporate value. The business risk has a significant negative effect on financial performance and corporate value. Financial performance has a significant positive effect on corporate value. The study concludes that asset usage activities can determine the capital structure, financial performance and corporate value. Therefore, the corporate's management and financial analysts can examine the asset usage activities and capital structure, busines risk and financial performance to predict the future value of the corporate.

Keywords: Asset usage Activities, Capital Structure, Business Risk, Financial Performance, Corporate Values.

DOI: 10.7176/EJBM/11-36-07

Publication date: December 31st 2019