Monica Falen Foila, graduate student of the Magister of Management Sciences, Faculty of Economics, Sriwijaya University, Palembang

e-mail: monicafalenfoila01@gmail.com

Hj. Sulastri, Ph.D of Financial Management Economics, Faculty of Economics, Magister of Management Sciences, Sriwijaya University, Palembang

e-mail: sulastri2310@gmail.com

Yuliani, Ph.D of Financial Management, Faculty of Economics, Magister of Management Sciences, Sriwijaya University, Palembang

ORCID ID: 0000-0003-3488-7941
e-mail: yulianisyapril@gmail.com

Hanafi Agustina, Ph.D of Economics in HR Management, Faculty of Economics, Magister of Management Sciences, Sriwijaya University, Palembang

ORCID ID: 0000-0003-2966-3943
e-mail: tinahanafi@ymail.com

The Effect of External Financing Needs and Suistainable Growth on Firm Value in Manufacturing Companies Registered on Indonesia Stock Exchange

Abstract. Introduction. Many companies use external financing needs to meet business operations needs or for company investment capital. External financing needs are preferred in form of debt rather than issuance of new shares for two reasons; first is the consideration of emissions costs. Besides debt used to finance all company activities, the problem of growth is also important because it involves the survival of a company. Growth describes the company’s ability to generate profits. Empirical studies of the relationship between the external financing needed (EFN), company growth,  and firm value until now have not reached a comprehensive conclusion. It is indicated by various studies in scope that providing various results. In this study, the research populations were manufacturing companies registered in the Indonesia Stock Exchange (IDX) for the period 2012-2016. 124 companies were studied. The analysis used multiple regression.

Purpose. The purpose of this study was to conduct an analysis and obtain empirical evidence of the effect of External Financing Needs, Sustainable Growth, and Firm Value.

Results. The results showed that External Financing Needs in manufacturing companies had a not-significant effect on Firm Values, meaning that high or low External Finance of company needs did not affect the firm value of a company, and the Sustainable Growth Rate in manufacturing companies had a significant effect on Firm Valueit means that high or low a sustainable growth of a company will have an affect on the firm value of a company.

Conclusion. External Financing Needs (EFN) in manufacturing companies had no significant effect on PER, meaning that the high and low EFN of a company does not affect the firm value of  a company. Sustainable Growth Rate (SGR) in manufacturing companies had a significant effect on PER, meaning that the high and low SGR of a company will affect the firm value of company.

Keywords : External Fiancing Needs, Suistanable Growth, Firm Value.

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