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Comparison of financial performance and firm value before and after mergers and acquisitions of non-financial companies in Indonesia

Author

Listed:
  • Jubaedah Nawir

    (Faculty of Economics and Business, Universitas Pembangunan Nasional Veteran Jakarta, Pondok Labu, 12450, Jakarta, Indonesia)

  • Kevin Christoper

    (Faculty of Economics and Business, Universitas Pembangunan Nasional Veteran Jakarta, Pondok Labu, 12450, Jakarta, Indonesia)

  • Himawan Rahardika

    (Faculty of Economics and Business, Universitas Pembangunan Nasional Veteran Jakarta, Pondok Labu, 12450, Jakarta, Indonesia)

  • Rida Anisa Permata

    (Faculty of Economics and Business, Universitas Pembangunan Nasional Veteran Jakarta, Pondok Labu, 12450, Jakarta, Indonesia)

  • Helena Olivia Yosih N

    (Faculty of Economics and Business, Universitas Pembangunan Nasional Veteran Jakarta, Pondok Labu, 12450, Jakarta, Indonesia)

Abstract

This study was conducted to see whether there is a difference between mergers and acquisitions on financial performance and firm value or not. A total of 31 companies conducting mergers and acquisitions in 2016-2018 listed on the Indonesia Stock Exchange were sampled in this study. The occurrence of decline in profitability, liquidity, activity ratios and firm value as well as an increase in solvency ratios after mergers and acquisitions became the impetus for conducting research. The measuring tool of profitability is Net Profit Margin (NPM). The measuring tool of liquidity is the Current Ratio (CR). The measuring tool of Solvency is the Debt-to-Equity Ratio (DER). The measuring tool for the activity ratio is Total Asset Turnover Ratio (TATO). And the instrument for measuring the value of the company is the stock price. This study used the Wilcoxon-Signed Rank Test to test the hypothesis. The results showed that there was a difference in the Current Ratio (CR) after the merger and acquisition. However, mergers and acquisitions make no difference in Net Profit Margin (NPM), Total Asset Ratio (TATO), Debt-to-Equity Ratio (DER), and Firm value. Key Words:Mergers and Acquisitions, Financial Performance, Firm Value

Suggested Citation

  • Jubaedah Nawir & Kevin Christoper & Himawan Rahardika & Rida Anisa Permata & Helena Olivia Yosih N, 2023. "Comparison of financial performance and firm value before and after mergers and acquisitions of non-financial companies in Indonesia," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 12(3), pages 318-323, April.
    • Handle: RePEc:rbs:ijbrss:v:12:y:2023:i:3:p:318-323
    DOI: 10.20525/ijrbs.v12i3.2575
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    References listed on IDEAS

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    1. Puja Aggarwal & Sonia Garg, 2022. "Impact of Mergers and Acquisitions on Accounting-based Performance of Acquiring Firms in India," Global Business Review, International Management Institute, vol. 23(1), pages 218-236, February.
    2. Malatesta, Paul H., 1983. "The wealth effect of merger activity and the objective functions of merging firms," Journal of Financial Economics, Elsevier, vol. 11(1-4), pages 155-181, April.
    3. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(3), pages 355-374.
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