The Influence of Liquidity, Profitability and Leverage on Profit Management and Its Impact on Company Value in Manufacturing Company Listed on Indonesia Stock Exchange Year 2011-2015

The Company is a unit of production activity that processes economic resources to provide goods and services for the community to gain profit and satisfy the needs of society. Wahyudi and Pawestri (2006), the company's main objective is to increase the value of the company. The higher the value the company describes the more prosperous the owner. The increase in corporate value is always accompanied by an increase in corporate profits. Directly increase in profits will prosper the owner. The company's value can be seen from the price to book value (PBV). PBV is a value that can be used to compare whether a stock is more expensive or cheaper than other stocks. According to Ahmed and Nanda (2004) in Jefriansyah (2013), almost all investment decisions in the capital market are based on the development of the PBV. High PBV will make investors believe in the company's future prospects. The amount of PBV cannot be separated from the policies taken by the company. One of the factors that may affect the value of the company is earnings management (earnings management). Earnings management is a condition in which the management to intervene in the process of preparation of financial statements for external parties so as to flatten, raise, and lower earnings (Schipper, 2012 in Ningsaptiti, 2010). Scott (2003) defines profit management as an action made through the choice of accounting policies to obtain certain goals, for example, to meet its own interests or increase the market value of the company. Managers tend to do more earnings management by controlling accrual transactions, ie transactions that do not affect cash flow (Friedlan, 1994). While on the other hand, investors also tend to concentrate in the income statement as investors found earnings stability will affect the stability of dividends. Profitability is the company's ability to generate profits. Profit is often a measure of company performance, where when a company has a high profit means it can be concluded that the company's performance is good and vice versa. Income smoothing is one form of earnings management. Managers tend to do the activity because with low profits or even suffering losses, will worsen the performance of managers in the eyes of the owner and will worsen the company's image in Abstract: This study examines the effect of likuidity, profitability, and leverage on earnings management and its impact on the value of the company. The study uses hypothesis testing on secondary data obtained from corporate website and the official website of the indonesia stock exchange. The firm-year observation of this study consists of 150 manufacturing companies listed on the indonesia stock exchange from the period of 2011-2015. The result show that liquidity, profitability, and leverage jointly affect earnings management; liquidity, profitability, and leverage individually affect earning management; liquidity, profitability, leverage and earnings management together affect company value; liquidity, profitability, leverage and earnings management individually affect company value; earning management partially mediates the effect of liquidity, profitability, and leverage on company.