The Effect of Capital Adequacy Ratio, Non-Performing Loan, Net Interest Margin, Loan to Deposit Ratio, and Cost to Income Ratio on the Firm Value of Banks Listed on the Indonesia Stock Exchange for the 2021–2024 Period

Awen Alif ATHAYYA; Yulazri YULAZRI

doi:10.38142/jogta.v3i4.1615

Authors

Awen Alif ATHAYYA Esa Unggul University, Indonesia
Yulazri YULAZRI Esa Unggul University, Indonesia

DOI:

https://doi.org/10.38142/jogta.v3i4.1615

Keywords:

Firm Value, Capital Adequacy Ratio, Non-Performing Loan, Net Interest Margin, Loan to Deposit Ratio, Cost to Income Ratio

Abstract

This research investigates the influence of financial performance ratios on firm value within the banking industry listed on the Indonesia Stock Exchange (IDX). Firm value is assessed using the Tobin's Q metric, with the independent variables comprising the Capital Adequacy Ratio (CAR), Non-Performing Loans (NPL), Net Interest Margin (NIM), Loan-to-Deposit Ratio (LDR), and Cost-to-Income Ratio (CIR). A quantitative causal method employing multiple linear regression analysis is applied. The data were obtained from the financial reports of conventional banks registered on the IDX. Out of 45 banks considered as the study population, 41 met the sample criteria over the 2021–2024 period, resulting in 123 observations. Prior to regression, classical assumption tests were performed to validate the model. The findings reveal that CAR exerts a negative and significant impact on firm value, while NPL, NIM, and LDR show negative and significant relationships. Conversely, CIR demonstrates no significant influence. These outcomes imply that factors such as capital strength, asset quality, and credit distribution efficiency are key determinants shaping investors' evaluation of banking firm value.

References

Anggriani, R. S., & Widyawati, D. (2024). Pengaruh ukuran perusahaan dan kinerja keuangan terhadap nilai perusahaan. Jurnal Ilmu dan Riset Akuntansi, 10(2), 496. https://doi.org/10.32493/inovasi.v10i2.p496-506.36304

Bila, A. S., & Sugandha. (2022). Pengaruh return on equity (ROE), loan to deposit ratio (LDR), biaya operasional pendapatan operasional (BOPO), dan non performing loan (NPL) terhadap nilai perusahaan pada subsektor perbankan. Jurnal Ekonomi, Manajemen dan Perbankan, 3(1), 1–12.

Brigham, E., & Houston, J. F. (2019). Fundamentals of financial management. Cengage Learning.

Burger, A., & Moormann, J. (2008). Productivity in banks: Myths & truths of the cost-income ratio. Banks and Bank Systems, 3(4), 85–94.

Debora. (2021). Pengaruh kinerja keuangan terhadap nilai perusahaan perbankan yang terdaftar di Bursa Efek Indonesia. Blantika: Multidisciplinary Journal, 2(1). https://doi.org/10.57096/blantika.v2i1.65

Donaldson, G. (1961). Corporate debt capacity: A study of corporate debt policy. Harvard University Press.

Hess, K., & Francis, G. (2004). Cost income ratio benchmarking in banking: A case study. Benchmarking: An International Journal, 11(3), 303–319. https://doi.org/10.1108/14635770410538772

Jagirani, T. S., Chee, L. C., & Kosim, Z. B. (2023a). Determinants of the firm value of listed banks in Pakistan: A panel data approach. Asian Economic and Financial Review, 13(4), 241–250. https://doi.org/10.55493/5002.v13i4.4764

Jagirani, T. S., Chee, L. C., & Kosim, Z. B. (2023b). Relationship between financial risks and firm value: A moderating role of capital adequacy. Investment Management and Financial Innovations, 20(1), 293–303. https://doi.org/10.21511/imfi.20(1).2023.25

Jonardy, M. J., & Avionita, V. (2024). The effect of financial performance of banking on firm value (An empirical study on conventional banking companies listed on the Indonesia Stock Exchange for the period 2018–2022). Accounting: Journal of Accounting and Finance, 9(2), 189–204.

Mawarti, B., Dimas, A. N., & Tantri, Y. S. (2022). The effect of financial ratios in determining company value: Empirical study on banking companies listed on the Indonesia Stock Exchange for the 2015–2019 period. Budapest International Research and Critics Institute (BIRCI-Journal): Humanities and Social Sciences, 5(1), 3001–3013.

Murni, S., & Sabijono, H. (2018). Peran kinerja keuangan dalam menentukan nilai perusahaan. JMBI UNSRAT (Jurnal Ilmiah Manajemen Bisnis dan Inovasi Universitas Sam Ratulangi), 5(2), 96–107. https://doi.org/10.35794/jmbi.v5i2.20806

Mustofa, I. A. (2023). Faktor-faktor internal yang berpengaruh terhadap nilai perusahaan: Studi empiris pada Bank BUKU IV. Jurnal Pendidikan Tambusai, 7(1), 1506–1513.

Myers, S. C., & Majluf, N. S. (1984). Corporate financing and investment decisions when firms have information that investors do not have. Journal of Financial Economics, 13(2), 187–221.

OJK. (2015). Peraturan OJK tentang transparansi dan publikasi laporan keuangan.

OJK. (2016). POJK No. 11 tentang konversi kewajiban penyediaan modal minimum bank umum (KPMM).

OJK. (2020). Laporan profil industri perbankan.

Olalere, O., Islam, M. A., Junoh, M. Z. M., Yusoff, W. S., & Iqbal, M. M. (2020). Revisiting the impact of intrinsic financial risks on the firm value of banks in ASEAN-5 countries: A panel data approach. Banks and Bank Systems, 15(2), 200–213. https://doi.org/10.21511/bbs.15(2).2020.18

Peraturan BI. (2011). Peraturan Bank Indonesia No. 13/10/PBI/2011 tentang Giro Wajib Minimum Bank Umum dalam Rupiah dan Valuta Asing.

Priharta, A., Buana, Y., Diana, D., & Sintarini, F. (2022). Corporate governance dan kinerja keuangan: Dampaknya pada nilai perusahaan. Jurnal Akuntansi dan Governance, 3(1), 16–28. https://doi.org/10.24853/jago.3.1.16-28

Putri, A. A. (2023). Pengaruh capital adequacy ratio (CAR) terhadap nilai perusahaan dengan likuiditas dan BOPO sebagai variabel intervening pada bank umum syariah periode 2016–2020.

Puspita, H. E., Shari, W., & Majid, N. H. A. (2025). Elements Influencing Company Value and the Role of Earnings Management as a Moderating Factor: Insights from Islamic Banking. Journal of Asian Scientific Research, 15(1), 147–161. https://doi.org/10.55493/5003.v15i1.5336

Refrayadi, H. A., & Kufepaksi, M. (2024). Pengaruh kepemilikan manajerial, capital adequacy ratio (CAR), loan to deposit ratio (LDR), dan non-performing loan (NPL) terhadap nilai perusahaan pada perusahaan sektor perbankan yang tercatat pada Bursa Efek Indonesia periode 2003–2022. Research Accounting and Auditing Journal, 1(1), 1–20.

Saputra, A., Gamayuni, R., & Sudrajad, S. (2024). The Impact of the Cost-to-Income Ratio on Firm Value with Net Interest Margin as a Mediating Variable in the Banking Sector of ASEAN-5 Countries. https://doi.org/10.4108/eai.4-9-2024.2353785

Simanjuntak, G. T., & Hidayat, T. (2023). Analisis pengaruh pandemi Covid-19 terhadap nilai perusahaan perbankan di Indonesia. Konferensi Ilmiah Akuntansi XI, 1–25.

Spence, M. (1973). Job market signaling. The Quarterly Journal of Economics, 87(3), 355–374. https://doi.org/10.2307/1882010

Sudiyanto, B., Puspitasari, E., & Kartika, A. (2012). The company's policy, firm performance, and firm value: An empirical research on the Indonesia Stock Exchange.

Tjahjadi, E., & Munandar, A. (2022). Analisis risiko kredit, NIM, dan LDR terhadap PBV pada bank BUKU 4 periode 2016–2020. Jurnal Ilmiah Manajemen, Ekonomi, dan Akuntansi, 6(2), 1387–1405.

Tobin, J. (1969). A general equilibrium approach to monetary theory. Journal of Money, Credit and Banking, 1(1), 15–29.

Twairesh, A. E., & ALserhan, H. F. (2025). The influence of capital adequacy, cost-to-income ratio, debt-to-equity ratio, loan-to-deposit ratio, and bank size on the performance of Jordanian banks. International Journal of Applied Economics, Finance and Accounting, 22(1), 31–39. https://doi.org/10.33094/ijaefa.v22i1.2237

Wangarry, M., Maramis, J. B., & Mangantar, M. (2023). Pengaruh capital adequacy ratio, non-performing loan, operating expenses on operating income, loan to deposit ratio terhadap firm value perbankan yang terdaftar di Bursa Efek Indonesia. Jurnal EMBA: Jurnal Riset Ekonomi, Manajemen, Bisnis dan Akuntansi, 11(4), 1408–1417. https://doi.org/10.35794/emba.v11i4.52377

Wardani, T., Putra, D., & Mahardika, K. (2023). The effect of net interest margin (NIM), non-performing loans (NPL), and capital adequacy ratio (CAR) on company value (Study of bank sub-sector companies listed on the Indonesia Stock Exchange for the 2018–2021 period). Management Studies and Entrepreneurship Journal, 4(4), 3840–3853.

Yuniarsa, A., & Annis, B. (2020). Pengaruh non performing finance, net interest margin, gearing ratio, dan asset turn over terhadap nilai perusahaan. JCA Ekonomi, 1(1), 102–114.