The Effect of EVA (Economic Value Added) on Abnormal Returns with Profit Growth as an Intervening Variable (Case Study of Telecommunica-tions Sector Companies Listed on the Indonesia Stock Exchange)

Idesatwika, Ida Bagus and Dewi, Ni Wayan Kurnia and Hudiananingsih, Putu Dyah (2022) The Effect of EVA (Economic Value Added) on Abnormal Returns with Profit Growth as an Intervening Variable (Case Study of Telecommunica-tions Sector Companies Listed on the Indonesia Stock Exchange). Repositori Politeknik Negeri Bali.

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Abstract

(ROA) and (ROE) as a measure of company performance are considered to have many weaknesses because they are short-term, and cost of capital has not been taken into account. Starting from these weaknesses, an alternative strategy is sought, namely (EVA), this method has advantage of including cost of capital in its calculation. telecommunications sector companies during Covid-19 period experienced a significant increase in profit growth caused by increasing use of internet in Indonesia so that EVA performance increased significantly, and fluctuating stock prices which will cause ab-normal returns. This study aims to determine how much influence EVA has on abnormal returns through profit growth and whether EVA method runs in same direction as abnormal returns received by investors. So that later investors do not put their capital wrong. data used in this study is secondary data obtained from IDX in form of quarterly financial statements for 2020-2021 to calculate EVA, profit growth, and abnormal returns. population in this study, namely the telecommunications sector companies listed on the Stock Exchange with a sampling technique using purposive sampling method. analytical model used in this study is path analysis. Statistically, results obtained in the form of significant data, namely, EVA has a positive and not significant effect on profit growth. EVA has a positive and insignificant effect on ab-normal returns. Profit growth has a positive and significant effect on abnormal returns. and mediating effect of EVA on abnormal returns which has a positive and significant effect through profit growth as an intervening variable.

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