Financial ratios and institutional ownership impact on healthcare firm’s value: A moderation role of leverage

Pardomuan Sihombing; Ricky Albert Husni; Elia Zakchona

doi:10.24914/jeb.v26i2.9372

Authors

Pardomuan Sihombing Faculty of Economics and Business, Mercu Buana University https://orcid.org/0009-0005-8757-1846
Ricky Albert Husni Faculty of Economics and Business, Mercu Buana University https://orcid.org/0009-0006-6609-112X
Elia Zakchona PT Daksayana Manajemen

DOI:

https://doi.org/10.24914/jeb.v26i2.9372

Keywords:

Financial ratios, price to book value, profitability, working capital, tangible asset, leverage, institutional ownership

Abstract

The pandemic has caused a contraction in the global economy. Amidst the slowing of the economy, a sector still grows so-called healthcare. This is shown by the growth in the healthcare sector’s GDP during the pandemic, but the PBV data on these companies didn’t show a satisfactory result. This study assesses factors that might increase the firm’s value of healthcare companies, such as profitability, working capital, tangible assets, and institutional ownership moderated by leverage on the firm’s value. This research uses a panel data analysis technique with moderated regression analysis (MRA) in E-views 12, quarterly financial statements from 2020-2021 of nine companies in the subsector of health services and equipment from the healthcare sector. The empirical results show that tangible assets have a negative impact, and leverage positively impacts a firm’s value, while the other factors do not affect a firm’s value. Leverage can only moderate tangible assets to weaken the negative effect of tangible assets, while other factors can’t be moderated by leverage. This result shows that leverage must be optimised to maximize the firm’s value to reduce the negative effects of an investment in tangible assets.

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