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<p style="text-align:justify;"><strong>Influence of fundamental factors</strong></p><p style="text-align:justify;">Based on the RV regression results, the fundamental factors of each company have different levels of influence as follows:</p><ul><li style="text-align:justify;">Fundamental/financial factors have influenced <span data-tracking="true" data-track-id="pending-1-1" class="fr-highlight-change"><span data-tracking-deleted="true" class="fr-tracking-deleted" contenteditable="false">on </span></span>SMGR and INTP valuation, where for SMGR the multiple ratios are EV/EBITDA, EV/BV, and EV/Sales while for INTP on EV/BV and EV/Sales.</li><li style="text-align:justify;">Meanwhile, in SMBR and SMCB, the intercept effect is more influential on the calculation of the four multiple ratios, namely P/E, EV/EBITDA, EV/BV, and EV/Sales.</li><li style="text-align:justify;">SMGR and INTP show that the valuation is influenced by the company's fundamental factors, meanwhile<span data-tracking="true" data-track-id="pending-1-0" class="fr-highlight-change">,</span> SMCB and SMBR <span data-tracking="true" data-track-id="pending-1-0" class="fr-highlight-change">are </span>influenced by factors other than the financial performance of the company.</li></ul><p style="text-align:justify;">. Therefore for Hypothesis H1 it can be concluded that in SMGR and INTP companies there are financial factors that affect the valuation of these companies. Meanwhile, for SMCB and SMBR, financial factors have less influence on the company's valuation</p><p style="text-align:justify;">&nbsp;</p><p style="text-align:justify;"><strong>Influence of Systematic Factors</strong>.</p><p style="text-align:justify;">Based on the analysis of the results of the regression of systematic factors on the valuation, several conclusions were obtained as follows:</p><ul><li style="text-align:justify;"><span style="color:#202124;">Increasing market share has a much bigger impact on the company in increasing the company's valuation. The statement in hypothesis H2 can be accepted because it is in accordance with the conclusions in this study. However, in the current market situation, increasing market share by taking </span><span data-tracking="true" data-track-id="pending-1-0" class="fr-highlight-change">a </span><span style="color:#202124;">competitor's market share will be able to trigger a price war so that a possible alternative is to make an acquisition.</span></li><li style="text-align:justify;"><span style="color:#202124;">The effect of government infrastructure spending on the valuation is not significant where the increase in infrastructure spending every year does not increase the valuation. This is certainly contrary to the general assumption that the cement industry has benefited from the government's massive infrastructure spending in recent years. Therefore, hypothesis H3 is rejected.</span></li><li style="text-align:justify;"><span style="color:#202124;">There has been a significant and consistent oversupply in the market, but at the same time, valuations have fluctuated in general, although with a slight upward trend in valuations. Hypothesis H4 is rejected because the oversupply in the market does not affect the valuation.</span></li><li style="text-align:justify;"><span style="color:#202124;">The company's excess capacity has a relatively small impact on the company's valuation, although a decrease in idle capacity has a positive impact on the company's valuation. The statement in hypothesis H5 is acceptable.</span></li><li style="text-align:justify;"><span style="color:#202124;">Factors that the management of each company does not have the ability to influence, namely government infrastructure spending and market oversupply, show different effects on company valuations. Infrastructure spending by the government has very little effect on the valuation where an increase of Rp. 1 Trillion will reduce the value of the company by Rp. 0.028 Trillion. This basically shows that the significant increase in spending on infrastructure by the government during the period 2013 to 2019 was not able to boost the valuation of cement companies. Meanwhile, oversupply in the cement market by 1% raised the company's valuation by Rp. 0.168 trillion. This shows that the decrease in the value of equity (stock price) was offset by a greater increase in the value of debt so that the firm value (EV) did not decrease.</span></li><li style="text-align:justify;"><span style="color:#202124;">Factors that are relatively controllable are the excess of installed capacity to production (idle capacity) and the company's market share, where an increase in the company's market share has a greater influence on the valuation than a decrease in idle capacity. Management's focus is to increase market share as the most influential factor on valuation, where the increase is carried out without reducing profitability.</span></li></ul><p style="text-align:justify;">&nbsp;</p><p style="text-align:justify;"><span data-tracking="true" data-track-id="pending-1-0" class="fr-highlight-change">The result </span><span data-tracking="true" data-track-id="pending-1-1" class="fr-highlight-change"><span data-tracking-deleted="true" class="fr-tracking-deleted" contenteditable="false"><span style="color:#202124;">Result</span></span></span><span style="color:#202124;"> of </span><span data-tracking="true" data-track-id="pending-1-0" class="fr-highlight-change">the </span><span style="color:#202124;">regression model between Valuation and Systematic Factors is showing that </span><span data-tracking="true" data-track-id="pending-1-1" class="fr-highlight-change"><span data-tracking-deleted="true" class="fr-tracking-deleted" contenteditable="false"><span style="color:#202124;">for </span></span></span><span style="color:#202124;">both INTP and SMGR had less influence from systematic factors than SMCB and SMBR. It is identified from high intercept in INTP and SMGR. Meanwhile</span><span data-tracking="true" data-track-id="pending-1-0" class="fr-highlight-change">,</span><span style="color:#202124;"> SMCB and SMBR had lower intercept</span><span data-tracking="true" data-track-id="pending-1-0" class="fr-highlight-change"><span style="color:#202124;">s</span></span><span style="color:#202124;">. This is </span><span data-tracking="true" data-track-id="pending-1-0" class="fr-highlight-change">in line </span><span data-tracking="true" data-track-id="pending-1-1" class="fr-highlight-change"><span data-tracking-deleted="true" class="fr-tracking-deleted" contenteditable="false"><span style="color:#202124;">inline</span></span></span><span style="color:#202124;"> with </span><span data-tracking="true" data-track-id="pending-1-0" class="fr-highlight-change">the </span><span style="color:#202124;">result of the regression between valuation and fundamental (financial) factors which show </span><span data-tracking="true" data-track-id="pending-1-0" class="fr-highlight-change">the </span><span style="color:#202124;">valuation of SMGR and INTP had influenced by </span><span data-tracking="true" data-track-id="pending-1-0" class="fr-highlight-change">the </span><span style="color:#202124;">financial performance of each company, meanwhile</span><span data-tracking="true" data-track-id="pending-1-0" class="fr-highlight-change">,</span><span style="color:#202124;"> SMCB and SMBR valuation depend on </span><span data-tracking="true" data-track-id="pending-1-0" class="fr-highlight-change">non-financial </span><span data-tracking="true" data-track-id="pending-1-1" class="fr-highlight-change"><span data-tracking-deleted="true" class="fr-tracking-deleted" contenteditable="false"><span style="color:#202124;">non financial</span></span></span><span style="color:#202124;"> factors.</span></p>
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Influence of different factors in a company

   Essay 2021-12-31T06:47:35.304000+00:00 avatar

DN Wiryasantika Wedagama

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Influence of fundamental factors

Based on the RV regression results, the fundamental factors of each company have different levels of influence as follows:

  • Fundamental/financial factors have influenced on SMGR and INTP valuation, where for SMGR the multiple ratios are EV/EBITDA, EV/BV, and EV/Sales while for INTP on EV/BV and EV/Sales.
  • Meanwhile, in SMBR and SMCB, the intercept effect is more influential on the calculation of the four multiple ratios, namely P/E, EV/EBITDA, EV/BV, and EV/Sales.
  • SMGR and INTP show that the valuation is influenced by the company's fundamental factors, meanwhile, SMCB and SMBR are influenced by factors other than the financial performance of the company.

. Therefore for Hypothesis H1 it can be concluded that in SMGR and INTP companies there are financial factors that affect the valuation of these companies. Meanwhile, for SMCB and SMBR, financial factors have less influence on the company's valuation

 

Influence of Systematic Factors.

Based on the analysis of the results of the regression of systematic factors on the valuation, several conclusions were obtained as follows:

  • Increasing market share has a much bigger impact on the company in increasing the company's valuation. The statement in hypothesis H2 can be accepted because it is in accordance with the conclusions in this study. However, in the current market situation, increasing market share by taking a competitor's market share will be able to trigger a price war so that a possible alternative is to make an acquisition.
  • The effect of government infrastructure spending on the valuation is not significant where the increase in infrastructure spending every year does not increase the valuation. This is certainly contrary to the general assumption that the cement industry has benefited from the government's massive infrastructure spending in recent years. Therefore, hypothesis H3 is rejected.
  • There has been a significant and consistent oversupply in the market, but at the same time, valuations have fluctuated in general, although with a slight upward trend in valuations. Hypothesis H4 is rejected because the oversupply in the market does not affect the valuation.
  • The company's excess capacity has a relatively small impact on the company's valuation, although a decrease in idle capacity has a positive impact on the company's valuation. The statement in hypothesis H5 is acceptable.
  • Factors that the management of each company does not have the ability to influence, namely government infrastructure spending and market oversupply, show different effects on company valuations. Infrastructure spending by the government has very little effect on the valuation where an increase of Rp. 1 Trillion will reduce the value of the company by Rp. 0.028 Trillion. This basically shows that the significant increase in spending on infrastructure by the government during the period 2013 to 2019 was not able to boost the valuation of cement companies. Meanwhile, oversupply in the cement market by 1% raised the company's valuation by Rp. 0.168 trillion. This shows that the decrease in the value of equity (stock price) was offset by a greater increase in the value of debt so that the firm value (EV) did not decrease.
  • Factors that are relatively controllable are the excess of installed capacity to production (idle capacity) and the company's market share, where an increase in the company's market share has a greater influence on the valuation than a decrease in idle capacity. Management's focus is to increase market share as the most influential factor on valuation, where the increase is carried out without reducing profitability.

 

The result Result of the regression model between Valuation and Systematic Factors is showing that for both INTP and SMGR had less influence from systematic factors than SMCB and SMBR. It is identified from high intercept in INTP and SMGR. Meanwhile, SMCB and SMBR had lower intercepts. This is in line inline with the result of the regression between valuation and fundamental (financial) factors which show the valuation of SMGR and INTP had influenced by the financial performance of each company, meanwhile, SMCB and SMBR valuation depend on non-financial non financial factors.


Influence of fundamental factors

Based on the RV regression results, the fundamental factors of each company have different levels of influence as follows:

  • Fundamental/financial factors have influenced on SMGR and INTP valuation, where for SMGR the multiple ratios are EV/EBITDA, EV/BV, and EV/Sales while for INTP on EV/BV and EV/Sales.
  • Meanwhile, in SMBR and SMCB, the intercept effect is more influential on the calculation of the four multiple ratios, namely P/E, EV/EBITDA, EV/BV, and EV/Sales.
  • SMGR and INTP show that the valuation is influenced by the company's fundamental factors, meanwhile, SMCB and SMBR are influenced by factors other than the financial performance of the company.

. Therefore for Hypothesis H1 it can be concluded that in SMGR and INTP companies there are financial factors that affect the valuation of these companies. Meanwhile, for SMCB and SMBR, financial factors have less influence on the company's valuation

 

Influence of Systematic Factors.

Based on the analysis of the results of the regression of systematic factors on the valuation, several conclusions were obtained as follows:

  • Increasing market share has a much bigger impact on the company in increasing the company's valuation. The statement in hypothesis H2 can be accepted because it is in accordance with the conclusions in this study. However, in the current market situation, increasing market share by taking a competitor's market share will be able to trigger a price war so that a possible alternative is to make an acquisition.
  • The effect of government infrastructure spending on the valuation is not significant where the increase in infrastructure spending every year does not increase the valuation. This is certainly contrary to the general assumption that the cement industry has benefited from the government's massive infrastructure spending in recent years. Therefore, hypothesis H3 is rejected.
  • There has been a significant and consistent oversupply in the market, but at the same time, valuations have fluctuated in general, although with a slight upward trend in valuations. Hypothesis H4 is rejected because the oversupply in the market does not affect the valuation.
  • The company's excess capacity has a relatively small impact on the company's valuation, although a decrease in idle capacity has a positive impact on the company's valuation. The statement in hypothesis H5 is acceptable.
  • Factors that the management of each company does not have the ability to influence, namely government infrastructure spending and market oversupply, show different effects on company valuations. Infrastructure spending by the government has very little effect on the valuation where an increase of Rp. 1 Trillion will reduce the value of the company by Rp. 0.028 Trillion. This basically shows that the significant increase in spending on infrastructure by the government during the period 2013 to 2019 was not able to boost the valuation of cement companies. Meanwhile, oversupply in the cement market by 1% raised the company's valuation by Rp. 0.168 trillion. This shows that the decrease in the value of equity (stock price) was offset by a greater increase in the value of debt so that the firm value (EV) did not decrease.
  • Factors that are relatively controllable are the excess of installed capacity to production (idle capacity) and the company's market share, where an increase in the company's market share has a greater influence on the valuation than a decrease in idle capacity. Management's focus is to increase market share as the most influential factor on valuation, where the increase is carried out without reducing profitability.

 

The result Result of the regression model between Valuation and Systematic Factors is showing that for both INTP and SMGR had less influence from systematic factors than SMCB and SMBR. It is identified from high intercept in INTP and SMGR. Meanwhile, SMCB and SMBR had lower intercepts. This is in line inline with the result of the regression between valuation and fundamental (financial) factors which show the valuation of SMGR and INTP had influenced by the financial performance of each company, meanwhile, SMCB and SMBR valuation depend on non-financial non financial factors.


Influence of fundamental factors

Based on the RV regression results, the fundamental factors of each company have different levels of influence as follows:

  • Fundamental/financial factors have influenced on SMGR and INTP valuation, where for SMGR the multiple ratios are EV/EBITDA, EV/BV, and EV/Sales while for INTP on EV/BV and EV/Sales.
  • Meanwhile, in SMBR and SMCB, the intercept effect is more influential on the calculation of the four multiple ratios, namely P/E, EV/EBITDA, EV/BV, and EV/Sales.
  • SMGR and INTP show that the valuation is influenced by the company's fundamental factors, meanwhile, SMCB and SMBR are influenced by factors other than the financial performance of the company.

. Therefore for Hypothesis H1 it can be concluded that in SMGR and INTP companies there are financial factors that affect the valuation of these companies. Meanwhile, for SMCB and SMBR, financial factors have less influence on the company's valuation

 

Influence of Systematic Factors.

Based on the analysis of the results of the regression of systematic factors on the valuation, several conclusions were obtained as follows:

  • Increasing market share has a much bigger impact on the company in increasing the company's valuation. The statement in hypothesis H2 can be accepted because it is in accordance with the conclusions in this study. However, in the current market situation, increasing market share by taking a competitor's market share will be able to trigger a price war so that a possible alternative is to make an acquisition.
  • The effect of government infrastructure spending on the valuation is not significant where the increase in infrastructure spending every year does not increase the valuation. This is certainly contrary to the general assumption that the cement industry has benefited from the government's massive infrastructure spending in recent years. Therefore, hypothesis H3 is rejected.
  • There has been a significant and consistent oversupply in the market, but at the same time, valuations have fluctuated in general, although with a slight upward trend in valuations. Hypothesis H4 is rejected because the oversupply in the market does not affect the valuation.
  • The company's excess capacity has a relatively small impact on the company's valuation, although a decrease in idle capacity has a positive impact on the company's valuation. The statement in hypothesis H5 is acceptable.
  • Factors that the management of each company does not have the ability to influence, namely government infrastructure spending and market oversupply, show different effects on company valuations. Infrastructure spending by the government has very little effect on the valuation where an increase of Rp. 1 Trillion will reduce the value of the company by Rp. 0.028 Trillion. This basically shows that the significant increase in spending on infrastructure by the government during the period 2013 to 2019 was not able to boost the valuation of cement companies. Meanwhile, oversupply in the cement market by 1% raised the company's valuation by Rp. 0.168 trillion. This shows that the decrease in the value of equity (stock price) was offset by a greater increase in the value of debt so that the firm value (EV) did not decrease.
  • Factors that are relatively controllable are the excess of installed capacity to production (idle capacity) and the company's market share, where an increase in the company's market share has a greater influence on the valuation than a decrease in idle capacity. Management's focus is to increase market share as the most influential factor on valuation, where the increase is carried out without reducing profitability.

 

The result Result of the regression model between Valuation and Systematic Factors is showing that for both INTP and SMGR had less influence from systematic factors than SMCB and SMBR. It is identified from high intercept in INTP and SMGR. Meanwhile, SMCB and SMBR had lower intercepts. This is in line inline with the result of the regression between valuation and fundamental (financial) factors which show the valuation of SMGR and INTP had influenced by the financial performance of each company, meanwhile, SMCB and SMBR valuation depend on non-financial non financial factors.

DN Wiryasantika Wedagama 2021-12-31T06:47:35.304000+00:00
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