Effect of Current Ratio and Debt to Equity Ratio on Price to Book Value moderating Return on Assets in Food and Beverage sub-sector companies

Abstract

This study aims to examine and analyze the effect of the Current Ratio and Debt to Equity Ratio on Price to Book Value with Return on Assets as a Moderating variable listed on the Indonesia Stock Exchange in the food and beverage sub-sector companies for the 2016-2020 period. The sample of the food and beverage sub-sector is 11 companies, over a period of 5 years. The simple technique is the Purposive Sampling Technique. The data collection technique is a documentation study with the type of data, namely secondary data. This research uses the Partial Least Square data analysis method. And the data is processed with Smart PLS. The results of this study indicate that the Current Ratio has no effect on Price Book Value, and Debt Equity Ratio has no effect on Price to Book Value. Then the results of this study also show that Return on Assets is not able to moderate the effect of the Current Ratio on Firm Value but Return on Assets is able to moderate the effect of the Debt to Equity Ratio on Firm Value. The amount of variation in PBV can be explained by the independent variable of 90.8% and 9.2% can be explained by other variables such as Total Asset Turnover and others.