Mediation effects financial performance toward influences of corporate growth and assets utilization

Abstract

Purpose The purpose of this paper is to measure the effects of corporate financial performance toward the influences of corporate growth and company asset utilization on the corporate market value. Design/methodology/approach This research is an explanatory research that describes the influences of one or more variables on other variables based on secondary data. This research took place in Indonesia and was carried out from 2011 to 2016. Findings The findings of this study are corporate growth has a significant influence on the corporate market value, implying that companies should consider the short-term and long-term profitabilities before making any investment decision; asset utilization has been confirmed to have a positive and significant influence on financial performance. Insights into asset utilization effectiveness and efficiency are important for company managers to consider in making strategic decisions upon operational activities of the company. Also, financial performance has a positive and significant influence on the corporate market value. Originality/value Research originality offered in this research is in the form of empirical evidence upon the influence of company asset utilization on the financial performance and corporate market value of a company. The finding of this research is expected to provide a better understanding on the role of company asset utilization in determining corporate financial performance which is known to be certain.