Page 22 - SUSTAINABILITY ISSUES & COVID-19

Market ratio is related to the value of the company, which is measured from the current stock price, to a particular
accounting value. The ratio provides a perspective of how well investors assess the risk and return of the company in
the future (Gitman, 2009).

There are two ways to measure the value of a company: the P / E ratio is generally used to assess stock prices, the
P / E ratio measures the value that investors are willing to pay for every dollar of company income. The P / E ratio
level illustrates investor confidence in the company’s future performance. M / B ratio describes an assessment of how
investors view company performance. The M / B ratio is related to the market value of a company’s stock compared
to the company’s book value based on accounting. The company’s stock price is expected to perform well, generate
profits, increase market share, release new products, generally sold at a higher M / B ratio.

The research of Brinkhuis and Scholtens (2018) found that investors do not value differently the appointment of CEO
/ CFOs for women and men. While Chauhan and Dey (2017) concluded that the presence of female directors in the
diversity of directors’ gender did not affect the firm value.

Isidro and Sobral (2015) conclude that there is no direct relationship between female directors and corporate value,
but there is an indirect relationship of female directors with company performance, through improving business
aspects related to company values, such as corporate compliance with ethical and social standards assessed can
increase firm value.

Ullah, Fang, and Jebran (2020) found that female directors on the board of directors had a positive effect on firm value
for improve management discipline, reduce agency conflict, and improve corporate governance.

The market shows a positive reaction in the short term to the appointment of female directors (Campbell and
Vera, 2010). The representation of women on the committee will have a positive effect on firm value (Green and
Homroy, 2018).

On the ther hand female board of directors can worsen firm value. Female directors can improve firm value, but only
to a certain point, then reduce firm value (Martinez, Oms, and Sempere, 2016). Women’s representation on the board,
audit committee, CFO / CEO leads to more conservative reporting, higher levels of social and environmental disclosure,
lack of tax aggressiveness and higher audit fees (Khlif and Achek, 2017).

Companies owned by women tend to have lower success rates than those owned by men, this is because women use
less working capital, less labor, and fewer hours of work and have preferences for different business goals, which affect
company performance (Fairlie and Robb, 2009).

Cash holding has a nonlinear relationship with firm value (Nguyen, Nguyen, and Le, 2017; Ha and Tai, 2017). Cash
holding has a positive effect on the firm value but only up to the optimal level of cash holding and after passing the
optimal limit will reduce the firm value (Sola. Tereul, and Solano, 2013; Loncan and Caldeira, 2014).

Cash holding companies are valued higher in times of crisis (Chang, Benson, and Faff, 2016). Because it can reduce
the risk of failure during times of crisis (Palvia, Vahamaa, and Vahamaa, 2015). Cash holding aims to protect potential
risks from unexpected events in the future (Zeng and Wang, 2015). Holding cash will also increase liquidity and reduce
funding yield, with an appropriate cash holding level to maximize the firm value (Lei and Cao, 2018).
Hypothesess of this study are as follows:

H : Female CFO has a positive effect on firm value.
1
H : The higher the level of cash holding the company will weaken the influence of female CFO on firm value.
2

International Conference on Sustainability 21
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