A high ROA indicates that the company is able to generate profits from its assets efficiently

Oct 13, 2025 by recoveryshake.com 113 views

The Effect of Capital Structure, Return on Assets, Return on Equity, Return on Investment, and Altman Z-Score on Investor Expectations in Public Company Property and Real Estate Subsectors Listed on the Indonesia Stock Exchange in 2014-2018

Introduction

Investment in the property and real estate sector has always been a popular choice among investors. The long-term advantages and high potential asset values are the main attractions. However, choosing the right company to invest requires careful analysis. This study aims to reveal the effect of several key factors on investor expectations in the property and real estate sector listed on the Indonesia Stock Exchange (IDX) in the 2014-2018 period.

Factors Analyzed

This study examines the effect of five important factors, namely:

1. Capital Structure:

The composition between own capital and debt in the company has a significant impact on investor confidence. A balanced capital structure is essential for companies to attract investors and increase their value. A company with a high debt-to-equity ratio may be perceived as riskier by investors, which can negatively impact investor expectations.

2. Return on Assets (ROA):

The company's ability to generate profits from its assets is an important indicator for investors. A high ROA indicates that the company is able to generate profits from its assets efficiently, which can increase investor expectations. On the other hand, a low ROA may indicate that the company is not able to generate profits from its assets efficiently, which can negatively impact investor expectations.

3. Return on Equity (ROE):

The company's ability to generate profits from capital invested by shareholders is another important indicator for investors. A high ROE indicates that the company is able to generate profits from its shareholders' capital efficiently, which can increase investor expectations. On the other hand, a low ROE may indicate that the company is not able to generate profits from its shareholders' capital efficiently, which can negatively impact investor expectations.

4. Return on Investment (ROI):

The profits derived from each investment made show the efficiency of capital use. A high ROI indicates that the company is able to generate profits from its investments efficiently, which can increase investor expectations. On the other hand, a low ROI may indicate that the company is not able to generate profits from its investments efficiently, which can negatively impact investor expectations.

5. Altman Z-Score:

The Altman Z-Score is a model that measures the risk of bankruptcy. A high Z-Score value indicates that the company has a low risk of bankruptcy, which can increase investor expectations. On the other hand, a low Z-Score value may indicate that the company has a high risk of bankruptcy, which can negatively impact investor expectations.

Research Methods

This research uses secondary data from the IDX website and the company's website. The sample consisted of 23 property and real estate companies listed on the IDX during the 2014-2018 period. Purposive sampling technique is used to select samples that are relevant to research. Multiple linear regression analysis is applied to test the effect of independent variables on dependent variables (investor expectations).

Research Results

The results showed that:

Capital Structure, Return on Equity, and Altman Z-Score have a positive influence on investor expectations.

This shows that investors are more likely to invest in companies with balanced capital structures, high levels of profit for their own capital, and low risk of bankruptcy.

Return on Asset (ROA) has a negative influence on investor expectations.

This indicates that investors tend to be less interested in companies with low ROAs, even though the company has a good financial performance as a whole.

Return on Investment (ROI) has no significant influence on investor expectations.

This shows that investors may not pay much attention to ROI aspects in investment decision making.

Analysis and Implications

The results of this study provide some important implications:

Capital Structure:

Property and Real Estate Companies need to pay attention to their capital composition to increase investor confidence. The ratio of debt to equity that is too high can increase the risk of the company and reduce investor expectations.

Profitability:

The company must focus on increasing profits from the assets and capital owned. High ROA and ROE show the company's ability to generate profits and increase attractiveness for investors.

Financial Risk:

Managing financial risk and maintaining company stability is very important. The high Z-Score value shows that the company has a good ability to pay off its short-term obligations and reduce the risk of bankruptcy.

Conclusion

This study confirms that the capital structure, profitability, and financial risk are key factors that affect investor expectations in the property and real estate sectors. Companies need to pay attention to these aspects to attract investors and increase company value.

Suggestion

Further research can be done by considering other factors that can affect investor expectations, such as macroeconomic conditions, property market trends, and government policies.
Property and real estate companies can take advantage of the results of this study to develop more effective strategies in attracting investors and increasing company value.

Limitations of the Study

This study has some limitations. The sample size is limited to 23 property and real estate companies listed on the IDX during the 2014-2018 period. The study only considers the effect of five independent variables on investor expectations. Further research can be done to consider other factors that can affect investor expectations.

Future Research Directions

This study provides some future research directions. Further research can be done to consider other factors that can affect investor expectations, such as macroeconomic conditions, property market trends, and government policies. The study can also be extended to other industries and countries to provide a more comprehensive understanding of the factors that affect investor expectations.

Conclusion

In conclusion, this study provides some important insights into the factors that affect investor expectations in the property and real estate sectors. The study confirms that the capital structure, profitability, and financial risk are key factors that affect investor expectations. Companies need to pay attention to these aspects to attract investors and increase company value. Further research can be done to consider other factors that can affect investor expectations and to provide a more comprehensive understanding of the factors that affect investor expectations.
Q&A: The Effect of Capital Structure, Return on Assets, Return on Equity, Return on Investment, and Altman Z-Score on Investor Expectations in Public Company Property and Real Estate Subsectors Listed on the Indonesia Stock Exchange in 2014-2018

Frequently Asked Questions

Q1: What is the main objective of this study?

A1: The main objective of this study is to reveal the effect of several key factors on investor expectations in the property and real estate sector listed on the Indonesia Stock Exchange (IDX) in the 2014-2018 period.

Q2: What are the five independent variables analyzed in this study?

A2: The five independent variables analyzed in this study are:

Capital Structure: The composition between own capital and debt in the company.
Return on Assets (ROA): The company's ability to generate profits from its assets.
Return on Equity (ROE): The company's ability to generate profits from capital invested by shareholders.
Return on Investment (ROI): The profits derived from each investment made.
Altman Z-Score: A model that measures the risk of bankruptcy.

Q3: What is the research method used in this study?

A3: The research method used in this study is a multiple linear regression analysis, which is applied to test the effect of independent variables on dependent variables (investor expectations).

Q4: What are the results of this study?

A4: The results of this study show that:

Capital Structure, Return on Equity, and Altman Z-Score have a positive influence on investor expectations.
Return on Asset (ROA) has a negative influence on investor expectations.
Return on Investment (ROI) has no significant influence on investor expectations.

Q5: What are the implications of this study?

A5: The implications of this study are:

Capital Structure: Property and Real Estate Companies need to pay attention to their capital composition to increase investor confidence.
Profitability: The company must focus on increasing profits from the assets and capital owned.
Financial Risk: Managing financial risk and maintaining company stability is very important.

Q6: What are the limitations of this study?

A6: The limitations of this study are:

The sample size is limited to 23 property and real estate companies listed on the IDX during the 2014-2018 period.
The study only considers the effect of five independent variables on investor expectations.

Q7: What are the future research directions?

A7: The future research directions are:

Further research can be done to consider other factors that can affect investor expectations, such as macroeconomic conditions, property market trends, and government policies.
The study can also be extended to other industries and countries to provide a more comprehensive understanding of the factors that affect investor expectations.

Q8: What are the practical implications of this study?

A8: The practical implications of this study are:

Property and Real Estate Companies can take advantage of the results of this study to develop more effective strategies in attracting investors and increasing company value.
Investors can use the results of this study to make more informed investment decisions.