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Grouping Manufacturing Companies Based on Factors Affecting Firm Value Using C-Means Clustering

In: Proceedings of the Conference on SDGs Transformation Through the Creative Economy: Encouraging Innovation and Sustainability (TCEEIS 2023)

Author

Listed:
  • Marita Qori’atunnadyah

    (Institut Teknologi dan Bisnis Widya Gama Lumajang, Department of Informatics)

  • Fetri Setyo Liyundira

    (Institut Teknologi dan Bisnis Widya Gama Lumajang, Department of Accounting)

  • Neny Tri Indrianasari

    (Institut Teknologi dan Bisnis Widya Gama Lumajang, Department of Accounting)

Abstract

Every company aims to maximize firm value, a crucial goal in various industries. Key determinants of firm value include firm size, sales growth, Debt to Equity Ratio (DER), business age, Return On Assets (ROA), and total asset turnover. Understanding the interplay of these variables in shaping firm value is of utmost importance. This study delves into the 2021 firm value of manufacturing companies, utilizing the c-means clustering method to group them based on these value-influencing factors. The c-means method is a potent tool for data clustering, enabling the identification of meaningful patterns within datasets. Analysis reveals that configuring the c-means method with two distinct groups is the optimal approach for clustering these manufacturing companies. Group 1 represents a moderate firm value, while Group 2 boasts a significantly higher firm value. The results have multifaceted implications. Categorizing manufacturing companies into these two groups based on performance and value-affecting factors provides valuable insights for businesses and stakeholders. This information informs strategic decisions and interventions aimed at enhancing firm value, fostering growth, and ensuring long-term sustainability.

Suggested Citation

  • Marita Qori’atunnadyah & Fetri Setyo Liyundira & Neny Tri Indrianasari, 2023. "Grouping Manufacturing Companies Based on Factors Affecting Firm Value Using C-Means Clustering," Advances in Economics, Business and Management Research, in: Imam Abrori & Indrian Supheni & Muhammad Mudhofar & Wahyuning Murniati & Nico Irawan & Arfan Ikhsan (ed.), Proceedings of the Conference on SDGs Transformation Through the Creative Economy: Encouraging Innovation and Sustainability (TCEEIS 2023), pages 28-31, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-346-7_6
    DOI: 10.2991/978-94-6463-346-7_6
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