PROFITABILITY MEDIATES THE EFFECT OF INVESTMENT DECISIONS ON COMPANY OF VALUE

The objectives of this study are: analyze and empirically test the effect of investment decisions on the profitability of going public insurance companies listed on the Indonesia Stock Exchange in 2013-2018; analyze and empirically test the effect of investment decisions on the value of go public insurance companies listed on the Indonesia Stock Exchange in 2013-2018 and analyze and test empirically the effect of profitability on the value of go public insurance companies listed on the Indonesia Stock Exchange in 2013-2018. The type of data used is secondary data in the form of annual financial statements of listed companies listed on the Indonesia Stock Exchange. The population of this research is publicly listed insurance companies listed on the Indonesia Stock Exchange in 2013-2018. The sampling technique was carried out using purposive sampling, the sample of which went public insurance companies listed on the Indonesia Stock Exchange in 2013-2018 totaling 60 issuers. Data analysis techniques used are descriptive statistical tests, classic assumption tests, multiple linear regression tests, mediation variable tests and model feasibility tests. Based on the results of research testing concluded that: (1) Investment decisions have a negative and significant effect on profitability. (2) Investment decisions have a positive and significant effect on company value. (3) Profitability has a positive and significant effect on firm value. (4) Profitability cannot mediate between investment decisions and firm value. Variation of investment and profitability decision variables used in this model is able to explain variations in the variable value of companies going public insurance listed on the Indonesia Stock Exchange 2013-2018 64%, while the rest is influenced or explained by other variables not included in this research model.


INTRODUCTION
Every company listed on the Indonesia Stock Exchange (BEI) wants the price of shares sold to have high potential prices and attract investors to buy them. This is because, the higher the stock price, the higher the value of the company. The company of value that is indicated by a high price to book value (PBV) is the desire of the owners of the company, or the goal of business companies at this time, because it will increase the prosperity of the holders or stockholders wealth maximization (Brigham andEhrhardt, 2006 in Kurnia, 2013).
The company's main goal is to increase the company of value through increasing the political prosperity of the shareholders. Shareholders, creditors and managers are parties who have different interests and perspectives regarding the company. Shareholders will tend to maximize the value of shares and force managers to act in their own interests through their supervision. Creditors on the other hand tend to try to protect the funds they have invested in the company with guarantees and strict monitoring policies as well. Managers also have the urge to pursue their personal interests. In fact, it is also possible for managers to make investments even though these investments cannot maximize shareholder value. (Arieska andGunawan, 2011 in Afzal, 2012 In maximizing the value of the company, according to Murtini (2008) in Afzal, (2012), company management can carry out policies including investment policy. Investment decisions are short-term and long-term investments. Research Mursalim (2015), Pertiwi (2016), Afzal, (2012 and Astiari (2014) can provide empirical confirmation that investment decisions have a positive effect on company of value. But according to Moh Khoiruddin, (2015) investment decisions have a negative and significant impact on company of value. According to Hidayat (2010) 2019 According to Anthony and Govindarajan (2007) to overcome different and conflicting research results, a contingency approach is needed which reveals that the relationship between the various variables studied is influenced by other conditional variables. This contingency approach allows other variables to act as mediation (intervening), so in this study will add profitability variables as mediating variables (intervening).
Profitability (ROA) is the most important factor in influencing company value. According to Darmadji and Fakhrudin (2012) in Zulia Hanum (2009) profitability is a ratio that is often used to measure a company's ability to generate return on assets owned by a company. Research conducted by Kurnia (2013) obtained empirical evidence that profitability had a significant positive effect on firm value. However, research conducted by Astiari (2014) obtained empirical evidence that profitability has a significant positive effect on company of value.

Signaling Theory
According to Brigham and Houston (2001)  Signaling theory explains why companies have the drive to provide financial statement information to external parties. The impetus of the company to provide information because there is asymmetry of information between the company and outsiders because the company knows more about the company and prospects to come than outside parties (investors and creditors). Lack of information for outsiders about the company causes them to protect themselves by providing a low price for the company. Companies can increase company value by reducing information asymmetry. One way to reduce asymmetric information is by giving signals to outsiders (Arifin, 2005).
The relationship of signal theory with this research shows that investment decisions and funding decisions are often considered as a signal for investors in assessing the merits of a company, this is because investment decisions and funding decisions can have an influence on the company's stock price. An increase in the number of investment decisions and funding decisions is considered as a signal that the company has good prospects in the future. This increase often causes an increase in stock prices which means that the company of value increases, while the decline generally causes a decrease in share prices which means a decrease in the company of value (Hardiningsih, 2009).
An increase in debt can also be interpreted by outsiders about the company's ability to pay its obligations in the future, so the addition of debt will give a positive signal. This is because companies that increase debt can be seen as companies that are confident in the company's prospects in the future.
High profitability indicates good company prospects, so investors will respond positively to these signals and company value will increase (Mai. 2013). This can be understood because the company that managed to record increased profits, indicates the company has good performance, so that it can create positive sentiment for investors and can make the company's stock prices increase. Increase the price in the market, it will increase the company of value.

The company of value
The higher the price of a company, the higher the value of a company. The value of a company illustrates the prosperity of its shareholders so that the high value of the company is a hope for shareholders who invest their capital in a company. Increasing and optimizing company value is often the long-term goal of a company. The optimization of company value can be achieved through the financial management function, where a financial decision that is taken will affect other financial decisions and ultimately will have an impact on the company of value (French, 2006). Christiawan and Tarigan (2007) revealed several value concepts that explain the value of a company, namely nominal value, market value, intrinsic value, book value, and liquidation value. Nominal value is the value that is formally listed in the Articles of Association of profitability, is mentioned explicitly in the company's balance sheet, and also written clearly in a collective share certificate. Market value which is often called the exchange rate is the price that occurs from the bargaining process in the stock market. Because of this nature, market value can only be determined if the company trades its shares on the capital market. Intrinsic value is a value that refers to the estimated real value of a company so that this value is the most abstract concept. In this concept, the value of a company is not just the price of a set of assets, but the value of a company as a business entity that has the ability to generate profits in the future, Book Value is the value of a company calculated based on accounting concepts. The book value of a company is calculated by dividing the difference between total assets and total debt with the number of shares outstanding. The liquidation value is the sale value of all company assets after deducting all obligations that must be fulfilled. This value is the rights of shareholders which can be calculated in the same way as the book value, which is based on the performance balance prepared when a company is going to be liquidated. If the market mechanism is functioning properly, then the share price may not be below the liquidation value. Investors can use the book value to estimate the lower limit of the share price so that this value can be used as a safe limit to measure the value of the company for investment purposes, but there are some things to consider about the concept of book value (Christiawan and Tarigan, 2007). First, most assets are valued in historical value so that it is possible for some assets to be sold at a price far higher than the book value. Second, the existence of intangible assets in assets in liquidation often has no sale value. Third, book value is strongly influenced by accounting methods and estimates such as fixed assets depreciation methods, inventory valuation methods, and so on. Finally, there are possibilities that obligations arise that are not recorded in the financial statements because they have not been regulated by financial accounting standards.
Research now measures company value by using the Price to BookValue (PBV) ratio as a proxy. This ratio is to be used to avoid weaknesses owned by book values. This ratio is calculated by dividing the market price per share by the book value per share. By some researchers, this ratio is considered able to describe the value of the company Profitability The company's ability to generate profits is commonly called profitability. According to Brigham and Gapenski (2006), "Profitability is the net result of policies and decisions." Brigham and Houston in Kurnia (2013)) also stated that profitability is the net result of a series of policies and decisions in the company. Every company that is founded, is certainly oriented to profit by not sacrificing the interests of customers to get satisfaction. Earnings are a measure of the success of a company's financial performance. Kaplan and Norton (2000) state that, "Financial performance measures provide a clue whether the company's strategy, implementation and implementation contribute or not to increase corporate profits." In essence, the company must also increase profitability. Increased profits can be achieved by working effectively and efficiently (Peppard andRowland, 2004 in Kurnia, 2013). Thus, ideally a company must do the right work correctly. Effectiveness is important, but efficiency is no less important, because it is closely related to expenses, so company profits can be increased. High profitability indicates good company prospects, so investors will respond positively to these signals and the value of the company will increase (Sujoko dan Soebiantoro, 2007in Kurnia, 2013. There are several ratios used to measure the profitability of a company, including gross profit margin, which is the ratio of gross profit to sales, net profit margin, which is the ratio of profit after tax to sales, returnon equity, which is the ratio of profit after tax with own capital, and return on investment (Fakhruddin andHadianto, 2001 in Kurnia, 2013). This study establishes return on assets (ROA) as a proxy for profitability based on a consideration because ROA can measure the effectiveness of the company in generating net income by utilizing the assets owned to generate these profits, so that it can be an indicator of company success in the investor's view, which is what Dwiaji did (2011). According to Fakhruddin and Hadianto (2001), "Return on assets shows the ability of companies to generate profits from assets used or invested in one accounting period."

Investation Decision
Investment is the management of the resources owned in the long run to generate profits in the future. According to Harjito and Martono, (2005) in Wibowo, Edhi. (2012) investment is the investment of funds made by a company into an asset (assets) in the hope of earning income in the future. Fama (1978) in Wibowo (2012) states that the value of a company is solely determined by investment decisions. This opinion can be interpreted that investment decisions are important because to achieve the company's goals will only be generated through the company's investment activities.
According to Chung and Charoenwong in Wibowo (2012), the growth of one company is the existence of investment opportunities that generate profits. If there are profitable investment opportunities, then the manager tries to take these opportunities to maximize the welfare of shareholders because the greater the opportunity for a profitable investment, the greater the investment made. (1978) in Wibowo (2012) Gaver and Gaver (1993) in Wibowo (2012), investment opportunity is the value of the company, the amount of which depends on expenses determined by management in the future, in this case investment choices that are expected to produce greater profits. This opinion is in line with Smith and Watts (1992) in Wibowo (2012) which states that investment opportunities are a component of corporate value that is the result of choices to make investments in the future. According to Kallapur and Trrombley (1999) in Wibowo (2012) that a company's investment opportunity cannot be observed for parties outside the company so a proxy is needed to see it.

Logical Relationship Between Variables and Hypothesis Formulation Effect of Investment Decisions on Profitability Harjito and Martono, (2005) in Wibowo (2012) investment is the investment of funds made by a company into an asset (assets) in the hope of earning income in the future. Fama
Wahyudi and Pawestri (2006)

Population and Sample Determination
Population is a generalization area that consists of objects or subjects that have certain characteristics determined by researchers to study or draw conclusions. Samples are part of the total characteristics possessed by these populations (Sugiyono, 2007in Afzal, 2011 (Ghozali, 2013). Orthogonal variables are independent variables whose correlation value among independent variables is equal to zero. (Ghozali, 2013). In this study in detecting multicollinearity seen from the value of tolerance and the next opponent can be seen with the variance inflation factor (VIF). Both of these measurements indicate which of each independent variable is explained by other independent variables. A low tolerance value is the same as a high VIF value (because VIF = 1 / Tolerance). The cutoff value commonly used to indicate multicollinearity is a Tolerance value ≤ 0.10 or equal to a VIF value ≥ 10.

U Autocorrelation Test The autocorrelation test aims to test whether in the linear regression model there is a correlation between the error of the intruder in the t period and the error of the intruder in the t-1 period (before). If there is a correlation, then it is called an autocorrelation problem. Autocorrelation
arises because sequential observations all the time are related to one another. This problem arises because residuals are not free from one observation to another. This is often found in time series data because disturbance in an individual group tends to affect the disorder in the same individual / group in the next period. In this study in testing autocorrelation by using the Runs Test, that is by comparing the significance value with a probability of 5%.

Heteroscedasticity Test Heteroscedasticity test aims to test whether in the regression model there is an inequality of variance from the residuals of one observation to another. If the variance from one observation residual to another observation is fixed, then it is called Homoscedasticity and if it is different is called Heterokedasticity. A good regression model is that of Henomoskedasticity or
Heteroskedasticity does not occur. And in this study to determine heteroscedasticity using a glacier test that is> 0.05 is said to not occur symptoms of heterokedasticity.

Two-stage Linear Regression Analysis
In regression analysis, besides measuring the strength of the relationship between two or more variables, it also shows the direction of the relationship between the dependent variable and the independent variable. The dependent variable is assumed to be random / stochastic, which means it has a probabilistic distribution. The independent / independent variable is assumed to have a fixed value in repeated sampling (Ghozali, 2013 (Ghozali, 2013).
The fundamental drawback of using the coefficient of determination is the bias towards the number of independent variables entered into the model (Ghozali, 2013). If in the empirical test the negative adjusted R² value is obtained, then the adjusted R² value is considered to be valued zero. Mathematically if the value R ² = 1, then Adjusted R ² = R ² = 1 whereas if the value R ² = 0, then adjusted R ² = 0, then adjusted R ² = (1-k) (n -k) if k> 1, then adjusted R ² will be negative (Ghozali, 2013).

Descriptive Statistics Test
Descriptive statistical tests try to explain or describe each of the variables related in this study. Descriptive statistical tests present numerical measures that are very important for sample data. Descriptive statistics are statistics used to analyze data by describing or describing data that has been collected as it is without intending to make conclusions that apply to the public or generalizations. Descriptive statistics are used to describe the variables contained in the study. Description of a data seen from the average value (mean), standard deviation, the maximum value and minimum value (Ghozali, 2013). This test is done to make it easier to understand the variables used in research.  Classic assumption test Normality Test Testing of data normality is done using statistical tests (Kolmogorov-Smirnov). Presentation of the normality test can be seen as follows : Based on the normality test, therefore an outlier data is carried out. Outlier data is data that has unique characteristics that look very different from other observations and appear in the form of extreme values (Ghozali, 2013). Outlier data detection is done by converting data values into standartzed scores (Z score). For the case of small samples or less than 80, a standard score with a value of more than 1.5 is declared an outlier (Ghozali, 2013).
From this explanation, in this study, outlier data were carried out, the initial data amounted to 60 data, after being outlier 52 data were processed. Then do the normality test data again in table 5 as follows:

Multicollinearity Test
Multicollinearity test aims to test whether the regression model found a correlation between independent variables (independent), which can be known through Variance Inflation Factor (VIF).

Two-Stage Multiple Linear Regression Analysis
The results of the classical assumption test show that the data are normally distributed, there is no multicollinarity, autocorrelation and heterocedasticity, so the next step is multiple linear regression analysis. The regression coefficient of the investment decision variable is -0.220, which means that the higher the investment decision, it can reduce profitability.

Effect of Investment Decisions on Profitability
The results of this study prove that investment decisions have a negative and significant effect on profitability. The existence of a significant negative effect can be made possible because in utilizing investment opportunities, companies rely on funds from external parties (creditors). This can be seen from the acquisition of net profit that is not proportional to the increase in company assets. So that investors assess the increase in company assets is due to external funding through debt issuance, which in turn can increase the company's financial risk, including the risk of bankruptcy.
In addition, the profits derived by the company are prioritized for paying dividends rather than being used to take investment opportunities, this is evidenced by the stable dividend payments made by companies. Theoretically, if the profits generated are prioritized to pay dividends, then the investment opportunities of companies that come from internal funding will be even smaller which can ultimately hamper the company's growth. Thus, even though the profits generated by large companies, but not necessarily by companies used to utilize investment.
These results are consistent with the theory put forward by Fama (1978) in Wibowo (2012) states that the value of a company is solely determined by investment decisions. This opinion can be interpreted that investment decisions are important because to achieve the company's goals will only be generated through the company's investment activities. These results are in accordance with research conducted by Astiari (2014), Mursalim (2015) obtained empirical evidence that investment decisions have a significant effect on increasing profitability.

Effect of Investment Decisions on Company of Value
The results of this study prove that investment decisions have a positive and significant effect on Company of Value. This explains that the higher level of investment decisions set by the company will also produce high opportunities to get large profits. With companies that have high investment decisions, they are able to influence the understanding of investors to be interested in investing in these companies so as to increase the demand for shares in the company.
These results are consistent with the theory put forward according to Gaver andGaver (1993) in Edhi. (2012), investment opportunity is the value of the company, the amount of which depends on expenses determined by management in the future, in this case investment choices that are expected to produce greater profits. This opinion is in line with Smith and Watts (1992) in Wibowo (2012) which states that investment opportunities are a component of corporate value that is the result of choices to make investments in the future.
These results are consistent with research conducted by Wibowo (2012) and Astiari (2014), Mursalim (2015), Pertiwi (2016), obtain empirical evidence that investment decisions have a significant positive effect on Company of Value.

Effect of Profitability on Company of Value
The results of this study prove that profitability has a positive and significant effect on firm value. This explains that the higher the profit obtained by the company, the greater the return of investor capital, which would certainly make investors more interested in investing in the company. With the increasing number of investment requests, the company's share price will also be higher. If the stock price of a company rises then it indicates that the value of the company is also rising. These results are consistent with the theory put forward by Sujoko and Soebiantoro (2007) in Kurnia (2013) stating that high profitability indicates good company prospects, so investors will respond positively to these signals and the company's value will increase. This can be understood because a company that managed to record increased profits, indicates the company has a good performance, so that it can create positive sentiment for investors and can make the company's stock prices increase. Rising share prices in the market, it will increase the company of value.
These results are in accordance with research conducted by Halwi (2016), Mursalim (2015, Kurnia (2013) obtain empirical evidence that profitability has a significant positive effect on Company of Value. And research conducted by Astiari (2014) obtained empirical evidence that