Sales Growth and Firm Size Impact on Firm Value with ROA as a Moderating Variable

Objectives: This study aims to determine the sales growth and firm size impact of the firm value, and the return on assets as the moderating variable. These independent variables are the sales growth and firm size, where the dependent variable is firm value. The objects of this study are the consumer goods companies which was listed on the Indonesia Stock Exchange market from 2015 to 2020. Methodology: The amount of sample is ten consumer goods companies based on the purposive sampling technique. The research method is using SPSS application to run the regression analysis and which covered the descriptive statistics, classical assumption tests, multiple linear regression analysis, moderation regression analysis, and the hypotheses tests. The data of the study are normally distributed, free from multicollinearity and heteroscedasticity. Finding: The hypothesis results show that sales growth results have negative impact and not significant to the firm value; the total assets have positive impact and not significant on the firm value; sales growth and total assets have impact on the firm value which is not significant simultaneously. Investors have to be careful on investing in the company because if they are taking sales growth and firm size into the account to invest, this may make mistakes. The variable of ROA also cannot moderate the model. Conclusion: A company with high sales growth and large firm size does not guarantee to operate efficiently to generate profit and increase the firm value.


INTRODUCTION
and Yadav et al. (2021) stated that firm growth and firm size have received considerable attention in the economic literature. Every company aims to maximize the shareholders' profits to increase their wealth and prosperity. Shares express the firm's ownership (Nurleni et al., 2018). Firm value is sometimes associated with stock market price (Chesini & Giaretta, 2016;Sari & Hermuningsih, 2020). If the price of the book value is higher, the firm has good prospects. Goh et al.'s (2021) result shows that interest rate and exchange rate will impact the stock market. Susanti & Restiana's (2018) study on the determinants of firm value. The sales growth is positive and increasing which means that it will increase the firm value, which is the investors' expectation. Sales growth has a positive and not significant impact on firm value, partially (Pantow et al., 2015). The result of (Lazarus et al., 2021) stated that sales growth indicated a significant influence on corporate performance. While the result from (Pramesti et al., 2021) stated that sales growth has a negative and not significant effect on profitability. The result from (Wulandari et al., 2021) stated that sales growth has no impact on the firm value. The firm has excellent assets which means that it will make funds easier for the operations. Firm size partly influences company value (Suffah & Riduwan, 2016); however, the other result stated that firm size has a negative effect on firm value (Pratama & Wiksuana, 2016;Puspaningrum, 2015). The result of (Natsir & Yusbardini, 2019) stated that the firm size, capital structure, and profitability have a significant effect on the firm value, and also the profitability was able to mediate the effect of firm size and capital structure on firm value. On the other hand, the result from (Abeyrathna & Priyadarshana, 2019) stated that firm size has no considerable impact on profitability.
The results from (Setiadharma & Machali, 2017) show that firm size has negative effects on firm value while company growth, profitability, liquidity, tangible fixed assets, audit committee, and board size have significant effect on the firm value. Indonesian investors do not consider accounting information, they do not consider the capital structure and company size as the criteria of investment decisions. A study of investor behavior in Indonesian capital markets (Ady et al., 2013) found that Indonesian investors are more likely to make irrational investments when they recklessly sell expensive stocks and hold cheap stocks for a long time. These irrational investors in Indonesia do not process and interpret information properly. Sensible investor will analyze and read the company's financial statements and also evaluate the company's business performance before making an investment decision. In the study which was done by (Ismawati & Haryono, 2007), which was partially stated that fundamental factor and systematic risk that the investor in this industry considers is just the profitability which the Return on Asset (ROA) measures, meanwhile, the other factors such as liquidity, solvability, and market ratio do not have any significant impact in the stock buying decision. Sales growth and firm size have a positive effect on the profitability of non-financial sector companies in Pakistan (Nazir et al., 2021).
The results obtained from Tripathy & Uzma (2020) show the significant estimators that affect a company's cash holdings: Size, Accounts Payable, PPE, Sales, and RD. This study can be expanded further by conducting pre-and post-financial crisis studies that can help to determine the changes in cash holding behavior due to the crisis. Furthermore, combining ownership structure and board attributes can further enhance the understanding of what will define cash. This study investigates the effect of sales growth and firm size on firm value with return on asset as the moderating variable. The formula of ROA is dividing the net income by the total assets (Kasmir, 2010;Sumarsan, 2020). High ROA will show a good image for the firm and Sales Growth = This year sales -Last year sales Last year sales

Corporate Size
Firm size is classified according to various ways, such as total assets or market value of shares (Angeline & Sitorus, 2020;Puspitaningtyas, 2019). Big companies have differences in the working capital compared to small companies (Salimah & Herliansyah, 2019). Big companies have many sources of funds; therefore, they may require smaller working capital compared to total assets or sales (Nurhikmawaty et al., 2020). Firm size positively impacts debt levels (Suripto, 2015). Factors that affect the firm size are the managing of the firm, organization structure, and obtaining funds to finance the operation (Herlambang, 2014).

Corporate Size Indicator
According to Rodoni and Ali (2014), the total assets are usually very large and to avoid the scale bias, so the asset size need to be compressed. In general, a firm's size proxies are using logarithms (log) or natural asset logarithms.

Factors that affect corporate size
According to Herlambang (2014), large companies are: managed or led by a professional manager (not the company owner), the organizational structure of the company is complex, and they have job specialization, the probability of company failure is relatively low, and is relatively easy to obtain long-term capital for business development. Small companies are managed or led by the owner of the company, the organizational structure of the company is simple, and there are still many concurrent positions, the probability of company failure is relatively high, the business is quite challenging to develop because it is difficult to get loan for short and long terms.

The firm value
According to Sumarsan (2020), firm value is when prospective buyers are willing to pay for the compnay if the company is going to sell. Factors that affect firm value are the capital structure, liquidity, firm size, and profitability (Ellul, Pagano & Panunzi, 2010). Firm value is the real value or potential value that a company can create in the future, calculated by different valuation models or methods, making it possible to arrive at different results. Capital structure can affect the firm value because one of the finance manager's tasks is to determine the funding policies and investment activities that can increase the stock prices and, in the end, will increase the firm value. The finance manager should make the optimal financial combination which is associated with the various types of assessments of company performance. Liquidity can impact the firm's value because it measures how the management manages their working capital.

Corporate Size = Ln Total Asset
(2) Firm value is an investor's perception of a company that is often associated with stock prices. The share price is the price that occurs when the stock are traded on the stock market (Chen, et al., 1999;Wahyudi, 2020). Formula to Calculate Book Value Per Share (BVPS):

Return on assets = Net profit Total Asset
According to Jumingan (2014), many factors will influence the changes in net income (Net Income). The elements are the fluctuation of units sold and the selling price per unit, the cost of goods sold, business costs, non-operational income and expenses, the rise and fall of the corporate income tax, and the accounting methods changes. Pantow et al. (2015) study showed that sales growth has an insignificant and positive effect on firm value and firm size has a significant and negative impact on firm value, and return on assets has a substantial and positive effect on firm value.
Furthermore, the study of Suffah and Riduwan (2016) has concluded that the firm size and leverage will partially affect the firm value. Puspaningrum (2015) and Pratama et al. (2016) indicated that firm size has a negative effect on the company value. Figure 1. Conceptual Framework Figure 1 shows that the sales growth will increase the profit, in the end, will increase the firm value, firm size will get investments quickly, therefore will increase the firm value. Firm size can attract investors and stakeholders to increase sales growth; in the end, it will increase firm value. The concept shows that ROA as the moderating variable is to strengthen the impact on the firm value. The hypotheses in this study are as follows: H1: Sales growth affects firm value. H2: The corporate size affects the firm value. H3: Sales growth and corporate size affect firm value. H4: Sales growth and firm size affect the firm value with return on assets as a moderating variable.

Research methodology
This is quantitative research, and the research object is the consumer goods companies. The data are derived from the Indonesian Stock Exchange.

Population and Sample
According to Morissan (2019), the population can be defined as collecting subjects, variables, concepts, or phenomena. The sample is part of the population that represent the population. The population in this study is 50 companies. The sample is 10 companies, which was taken based on the purposive sampling technique. The criteria are the consumer goods companies which was listed in the Indonesian Stock Exchange, the companies that have profits during the year of observation, and the companies that have a positive sales growth during the observation. The study is using secondary data, such as the financial reports and documentation of the companies which were published. This study is using multiple linear regression analysis, and the formula is as follows.
The absolute difference value test equation model for moderation regression is as follows.

Results
This study is using descriptive analysis, classic assumption test, linear regression analysis of moderation, and hypothesis testing. In this study, the descriptive statistics aim to provide an overview of the data that has been processed consisting of minimum, maximum, average, and standard deviation of each variable (sales growth, firm size, firm value, and return on assets). The following is descriptive test result data:  After transforming the data, the results (Kolmogorov-Smirnov) are normally distributed by looking at the Asymp. Sig value (2-tailed), which is 0.2 (0.2 > 0.05) (Meiryani et al., 2020). Histogram normality test results after data transformation are as follows:

MIX: Jurnal Ilmiah Manajemen
Source: data processed, 2021 (SPSS output) Based on the picture above, the data is normally distributed because it can be seen from the curve lines that do not deviate to the left or right and form a reverse bell.

Multicollinearity Test
The multicollinearity test result is. Based on the table above, it can be observed that: The value of tolerance (α) for the variable sales growth is 0.824; the company size variable is 0.825; and the return on asset variable is 0.862, which means that the value is greater than 0.1. The variance inflation factor (VIF) value for the variable sales growth is 1,214; the company size variable is 1,211, and the return on assets is 1,160, which means that the value is less than 10 (Nwaigwe & Chinagorom, 2014). The multicollinearity test results showed that the variables of sales growth, firm size, and return on assets did not show multicollinearity.

Heteroscedasticity Test
The heteroscedasticity test of this study is as follows: Source: data processed, 2021 (SPSS output)

Figure 2. Image of Heteroscedasticity Test
Based on the picture above, it can be explained that the variables do not have heteroscedasticity because the data processing points are spreading and do not have a regular pattern (Rachmawati, Kartawinata, Wijayangka & Hasbi, 2020).

Multiple Linear Regression Analysis
The results of the study's multiple regression analysis tests are as follows. The model explains that: Constant (α) of -0.781 means that if the variable of sales growth and firm size is 0, the firm value decreases by 0.781. Regression Coefficient (β) sales growth variable of -3.515, which is negative, shows when the firm value is 0, and the sales growth variable has decreased by 1 unit. The firm value has decreased by 3.515 units-regression Coefficient (β) firm size variable 0.087, which is positive.

Moderation Regression Analysis
According to Ghozali (2018), the moderator variable is divided into three groups as follows:  Ghozali (2018) The moderation regression results of this study are as follows:  The moderation regression equation in this study is: Y = 6.770 -0.070 firm size + 1.500 ROA + 1.506 (firm size -ROA) The model explains that: 1. Constants (α) of 6.770, meaning if the firm size and return on assets (Z) are 0, the firm value increases by 6.770 units. 2. Regression Coefficient (β) 0.070, firm size variable is negative indicates the firm value is 0, and the firm size has increased by 1 unit; then the firm value decreased by 0.070 units. 3. Regression coefficient b3 is significant, which is 0.00 smaller than 0.05, and b4 is not significant at 0.383, greater than 0.05; the ROA in the test of an absolute difference does not moderately firm size to firm value only acts as a predictor variable in relationship model formed. The Coefficient of determination adjusted R Square (R 2 ) is 0.012 or equal to 1.2% of the firm value, which explains the independent variables. The remaining value of 98.8% is explained by other variables, such as capital structure and leverage.

Simultaneous Significance Test (F test)
The F test is used to test whether the independent variables will simultaneously affect the dependent variable. The value of the F table determines the degree of freedom 1 (df) = 3 (number of independent variables plus moderating variables) and degree of freedom 2 (df2) = 57 (number of samples minus independent variables and moderating variables). The significant value of 0.262 shows that sales growth, and firm size does not significantly impact the firm value. The results show that sales growth has a significant value of 0.307, which means that the variable of sales growth has no significant impact on the firm value. The firm size has a significant value of 0.411, which means the firm size has no significant positive impact on firm value.

Effect of Sales Growth on Firm Value
The results of this study are different from the study of Pantow et al. (2015). Based on the results, it was found that sales growth has a negative impact and no significant impact on the firm value. With an increase in sales, the firm is considered to be able to meet the customers' demands that require more funds, so the company needs to inject more funds by borrowing from the bank. However, the amount of debt that incurs interest expense will decrease the firm MIX: Jurnal Ilmiah Manajemen value. So, sales growth does not guarantee to increase the firm's profit and, in the end, has a negative impact on the firm value.  Table 10 shows that increased sales growth does not increase the firm's value because if sales growth increases and share prices decrease, it cannot increase firm value because the firm value is measured by share price divided by book value which is derived from the equity divided by shares owned.

Effect of Firm Size on Firm Value
The firm size has a positive impact but not significantly on firm value. The result supports the study of Saftiana, Mukhtaruddin, Putri, & Ferina (2017). The result differs from the research done by Indriyani (2017) (2020), and Akbar and Fahmi (2020). The large size of the firm will reflect the company's ability to buy the assets in large quantities. Big firm size is also considered as easy to attract investors to put additional funds into the company because investors saw the positive of the companies. However, the study results indicate that firm size does have a strong relationship with the firm value because if a large or small size firm operates efficiently, it will create profit and, in the end, increase the firm value. But, if a large or small firm operates inefficiently, it will incur losses.

The Effect of Sales Growth and Firm Size on Firm Value
Based on Ftest results, the significant value of 0.054 shows that sales growth and firm size have a simultaneous impact but not significant on the firm value. So, the third hypothesis, sales growth and firm size have a simultaneous impact but not significant on the firm's value, which means that sales growth and size of the company simultaneously have a relationship with the firm's value.

Effect of Sales Growth on Firm Value with Return On Assets as the Moderating Variable
The significant value is 0.187 (Z>0.05), which shows that the return on assets can not moderate the effect of sales growth on the company's value. Return on assets cannot strengthen the firm's value when projected with sales growth due to the increased sales followed by an increase in the net income, and assets cannot increase the perceived firm value in the eyes of investors to invest their capital. Based on the results, the research shows that the fourth hypothesis, return on assets, cannot moderate the sales growth to the firm value.

Effect of Firm Size on Firm Value with Return On Assets as the Moderating Variable
The return on assets cannot moderate the effect of firm size on firm value. The second absolute value test results show that the value of standardized return on assets with a significant value of 0.383 and the absolute value of the interaction between the moderating variables and the firm size.  Table 11 shows that the projected firm size with return on assets does not moderate the relationship between firm size and firm value. Suppose the addition of adequate assets and the utilization of assets is not optimal, which causes the profits to be insufficient. In that case, it will not increase the firm's value. The results indicate that the fourth hypothesis, return on assets, does not moderate firm size on firm value. CONCLUSION The conclusions of the study are: 1. The sales growth has negative and not significant impact on firm value in the consumer goods companies listed on the Indonesia Stock Exchange from 2015 to 2020. 2. The firm size has positive and not significant impact on the firm value in the consumer goods companies listed on the Indonesia Stock Exchange from 2015 to 2020. 3. The sales growth and firm size did not significantly affect the firm value in the consumer goods companies listed on the Indonesia Stock Exchange from 2015 to 2020. 4. The return on assets (moderating variable) on the sales growth variable only acts as a predictor variable (the dependent variable). 5. The return on assets (moderating variable) on the firm size variable only acts as a predictor variable (the dependent variable).
The suggestions for future researchers are to add more independent variables, such as liquidity, leverage, corporate governance, and other independent variables. Besides, the further researchers may consider taking more samples, a longer period of observation, other types of industries, and the other moderating variables in their research.