Effects of Intellectual Capital Performance on Companys Financial Performance: An Empirical Study on Financial Sector Non-Banking Companies Listed in Indonesia Stock Exchange

Asniati*Accounting Department, Andalas Universityasniati.bahari@gmail.com

Rendra SeptianoAccounting Department, Andalas Universityrendraseptiano@gmail.com

ABSTRACT

Intellectual Capital is one of the approaches that can be used to measure knowledge assets. Many studies found out that intellectual capital has a positive correlation with financial performance. The objective of this research is to find out the correlation of intellectual capital performance to company financial performance of financial sector non-banking companies in Indonesia. In this study, the Intellectual capital performance was measured by using Value Added Intellectual Coefficient (VAIC) method and Companys Financial Performance was measured by using Return on Assets (ROA) and Net Profit Margin (NPM). VAIC used Value Added of Physical Capital (VACA), Value Added of Human Capital (VAHU) and Value Added of Structural Capital (STVA) as the research indicators. This research was conducted to Financial Sector Non-Banking Companies Listed in Indonesia Stock Exchange from 2011-2013. There were 126 companies used for the research population. However, only 99 companies fulfilled the criteria to be included in the analysis as research sample. This research found out that VACA, VAHU and Intellectual capital have positive correlation to ROA. However, STVA does not have correlation to ROA. VAHU and Intellectual capital have positive correlation to NPM but do not have correlation to VACA and STVA. Findings of this research can serve as a guideline for financial sector non-banking company managers to manage their intellectual capital as well as to improve or reassess their companys financial performance. The findings also contribute to the knowledge and application of Financial Accounting and Financial Management.

Keywords: Value Added Intellectual Coefficient, Value Added of Physical Capital (VACA), Value f=Added of Human Capital (VAHU) and Value Added of Structural Capital (STVA), and Financial Performance.

1. IntroductionBackgroundRecently, the condition of world economic has been developing. It is proven by an improvement of information technology, tight competition and growth of innovation. Those factors are creating a high frequency of product traffic as the impact of world free trade. It makes many businessmen change their business paradigm from labour based business become knowledge based business. Knowledge business paradigm will transform knowledge into company revenue.The business environment has changed from industrial era become new economic era on strategy and creation of company value. Innovation, information system, organization management and resources based become the priority for the basic equity of company to compete in market (Ni Made and Ni Putu, 2012) and these factors are also known as knowledge assets. One of the approaches that can be used to evaluate and measure the knowledge assets is intellectual capital. Intellectual capital is known by many science subjects such as; management, information technology, sociology and also accounting (Sunarsih and Mendra 2012). Intellectual capital (IC) is the part of intangible asset that use as an instrument for determining company value. Intellectual Capital is also known as specific and valuable knowledge that is owned by organization (Fajri, 2012). Creation of company value makes the traditional accounting become not suitable in making decision by stakeholder because of the limitation in identifying and measuring organizations intellectual capital. Traditional accounting cannot identify and measure the intangible assets for Knowledge Base Company. Knowledge based company believed that knowledge will be raised as the most basic source of wealth in human societies in the new era. The Implementation of an effective strategy for knowledge management and becoming a knowledge-based organization as two necessary conditions for the success of organizations are under the conditions let them enter a historical and knowledge-based economy era (Beshkooh, 2013). It makes an accountant should understand how to identify, measure and disclose the intangible assets in financial statement.Knowledge Base Company is a business that depends on the quality of their employee. Azizi et al (2013) explain knowledge-based business environment requires an approach that embeds new intangible assets of organization such as knowledge and qualifications of human resources, innovation, and relation with costumers, organization culture, systems, and organizational structure. It means knowledge Base Company prefers to decrease the amount that will be spent in physical capital, and then allocate it to employees soft skill improvement. So, the allocation in improving employees soft skill is known as intellectual capital. Pulic (1998) find an indirect measurement of intellectual capital and also the efficiency of intellectual capital by using Value Added Intellectual Coefficient - VAICtm. The main components of VAIC consist of Physical Capital (VACA Value Added Capital Employed), Human Capital (VAHU Value Added Human Capital) and Structural Capital (STVA Structural Capital Value Added). Physical Capital is all of non-current assets own by company, such as land, building and equipment. Human Capital is the source of innovation and company strategy from employees personal skill to make the company more efficient. Structural capital is an indicator that interprets the efficiency of structural capital (Firer and William, 2003). VAIC model has been applied in many banking sectors around the world and each of these applications is proving the applicability, affectivity and credibility of VAIC in measuring intellectual capital efficiency (Abdulsalam et al, 2010). Most of other research that measures the intellectual capital is focusing on banking sector. Banking sector is not the only sector which measure of intellectual capital but what about others financial institution such as, Insurance Company, Securities Company, Finance Company and Other Financial Company?There is a lack of research in measuring intellectual capital for non-Banking sector, so further research needed. For this purpose the title for this research will be Effect of Intellectual Capital Performance On Companys Financial Performance: Empirical Study in Financial Sector Non-Banking Companies Listed in Indonesia Stock Exchange.

2. Theoretical Framework Intellectual CapitalAbdulsalam et al (2010) define intellectual capital of a company consist of all employees, their organization, and their ability to create value, which is evaluated at the market. Related to that, quoted from Mojtahedi and Ashrafipour (2013), Intellectual capital is the group of knowledge assets that are attributed to an organization and most significantly contribute to an improved competitive position of this organization by adding value to defined key stakeholders.Then Sunarsih and Mendra (2012) explain intellectual capital is an approach to evaluate and measure knowledge assets which become a focus in many subject such as, management, information technology, sociology and accounting. Where Steward (1997) stated: IC is collective brainpower or packaged useful knowledge, consisting of intellectual material knowledge, information, intellectual property, experience that can be put to use to create wealth.Intellectual capital is the new production system in mainly driven by technology, knowledge, expertise and relations with stakeholders which may collectively. The possession of knowledge, applied experience, organizational technology, customer relations and professional skills that provide a company with a competitive edge in the market is describe by Ahangar (2010) as intellectual capital. Then Cabrita and Bontis (2008) explained intellectual capital is a matter of creating and supporting connectivity between all sets of expertise, experience and competences inside and outside the organization. Intellectual capital is a phenomenon of interactions and complementarities, meaning that a resources productivity may improve through the investments in other resources. From an accounting perspective, intellectual capital can be inferred as the difference between book value and market value of firms. Then, Al-Shubiri (2013) explained Intellectual capital was not just a part of human brainpower but goes beyond that to the assets that can be identified and optimal use in organization. Pulic (1998) then classify intellectual capital into three main component; 1) Physical Capital, 2) Human Capital, and 3) Structural Capital. Physical CapitalPhysical Capital is an asset that has a physical form and not owned by the company are used efficiently and optimally in the company's operations to the creation of added value to the companies concerned (Soedaryono, 2012). As for the example of the Physical capital is land buildings, equipment, technology that easily sold or bought in the market (Firer and Williams, 2003).

Human CapitalHuman Capital is the source of innovation and company strategy those from through employees personal skill to make the company more efficient. Human capital refers to knowledge, skills and experiences that employees take them with themselves when they leave the organization (Ross and Ross, 1997). Mojtahedi (2013) defined Human Capital as the knowledge, skills and experience that employees take with them when they leave. Some of this knowledge is unique to the individual; some may be generic. Examples are innovation capacity, creativity, knowhow and previous experience, teamwork capacity, employee flexibility, tolerance for ambiguity, motivation, satisfaction, learning capacity, loyalty, formal training and education. Structural CapitalStructural capital is result of Human Capitals performance, such as organization, license, patent, image standard, and etc. In other word structural capital is all of intangible assets that own by company. It is supported by Ahangar (2010) who defined Structural capital as the supportive infrastructure for human capitalit is the capital which remains in the factory or office when the employees leave at the end of the day. It includes organizational ability, processes, data and patents. Structural capital includes all non-human resources of knowledge in the organization which consists of databases, organizational charts, procedures and administrative processes, strategies and generally consist of everything that create higher value for the organization rather than its physical aspect (Ross and Ross, 1997).Company Financial PerformanceReturn on Assets (ROA) Australian Shareholders Association (2010) defined return on assets (ROA) is a measurement of management performance. ROA tells the investor how well a company uses its assets to generate income. A higher ROA denotes a higher level of management performance. ROA can be measured by dividing total net income in one period with total assets owned by company that reflected in company financial statement. ROA explain how well the company use their assets in create profits. A positive and rising result of ROA will interpret a good management performance in using assets for creating profits, as long as other companys ROA is almost the same or less than the company.Net Profit Margin (NPM)Net Profit Margin is an indicator that reflects the range between Revenue/Sales and Net Income. NPM meanwhile indicate what percentage of a companys sales revenue would remain after all costs have been taken into account (Australian Shareholders Association, 2010). It means NPM could be determined by dividing the amount of total Net Income with the amount of Total Sales. NPM can use as a ratio to compared with other companies or analyzed over year. Declining amount of NPM over the year indicate increasing amount of expenditure used in order to reach sales. Rising amount of NPM over the year indicate efficiency used of expenditure in order to reach sales.Thesis DevelopmentBased on research theoretical framework, so this research developed the following hypothesis; 1.1 Ho: Physical Capital has no correlation to influence the company Return on Assets. Ha: Physical Capital has positive correlation to influence the company Return on Assets.1.2 Ho: Physical Capital has no correlation to influence the company Net Profit Margin. Ha : Physical Capital has positive correlation to influence the company Net Profit Margin.

2.1 Ho : Human Capital has no correlation to influence the company Return on Assets. Ha: Human Capital has positive correlation to influence the company Return on Assets.2.2 Ho: Human Capital has no correlation to influence the company Net Profit Margin. Ha: Human Capital has positive correlation to influence the company Net Profit Margin.

3.1 Ho: Structural Capital has no correlation to influence the company Return on Assets. Ha: Physical Capital has positive correlation to influence the company Return on Assets.3.2 Ho: Structural Capital has no correlation to influence the company Net Profit Margin. Ha: Structural Capital has positive correlation to influence the company Net Profit Margin.4.1 Ho: Intellectual Capital Performance has no correlation to influence the company Return on Assets. Ha: Intellectual Capital Performance has positive correlation to influence the company Return on Assets.4.2 Ho: Intellectual Capital Performance has no correlation to influence the company Net Profit Margin. Ha: Intellectual Capital Performance has positive correlation to influence the company Net Profit Margin.3. Research FrameworkVariables and MeasurementThis research was focus to measure and analyze the effect of intellectual capital performance (independent variable) to companys financial performances (dependent variable). Intellectual capital performance is divided into three categories; Physical Capital, Human Capital, Structural Capital and Value Added Intellectual Capital (VAIC). Then, company performance was measure by using ratio analysis which consists of Return on Assets Ratio and Net Profit Margin Ratio. Therefore, researcher used exploratory study to fulfil the research objective. Data CollectionPopulation of this research is all of financial sector those categories on Non-banking Company that are listed in Indonesias stock exchange, such as: Insurance Company, Securities Company, Finance Company and Other Financial Company. This Researcher used purposive sampling which take sample base on population performance to meet the researcher requirement of sample. Then, requirements of sample were: Classified as financial sector company, especially Insurance Company, Security Company, Finance Company and Other Financial Company. Disclose the financial statement at least in 3 years from 2011 to 2013 and never get net loses over the year. Never delisted from Indonesia Stock Exchange and provide annual report to Indonesia Stock Exchanges. Accounting date is ended at December 31.

Data Analysis MethodFirst thing that should be done before test the hypothesis is doing a classical assumption test. Classical assumption test is a test to examine the quality of the data that will be used in the research. The objective of this test is to estimate the independent variable as the estimator of dependent variable is not biased. The following classical assumption test that are use: 1) Normality Test. Normality test is used to determine whether the data are used is normal and included in data range. 2) Multicollinearity Test. Multicollinearity test should be done to test dependability correlation between independent variables. 3) Autocorrelation Test. Autocorrelation test should be done to examine independence of residual. 4) Heteroscedasticity Test. Heteroscedasticity test is a test to show occurrence of residual variance inequality in observation. After data passed the classic assumption test, it allow to examine the hypothesis.Hypothesis TestingStatistic t-TestThe aim of statistic t-test is to individually test how significant independent variable influence dependent variable. If t count t table, it means independent variabe have simultaneously and significantly affects to dependent variable. Meanwhile if t count < t table, it means independent varibale have simultaneously and significantly affect to dependent variable. Then Yamin and Kurniawan (2009) also explain result of t-test can be seen from significance level (p-value). If t table is smaller than t count, it means there is have a significant correlation between independent variable and dependent variable and if t table, it means there is no significant relatioship between independent variable and dependent variable.Coefficient of Determination (R2)According to Janie (2012) Coefficient of Determination is used to measure how far the ability of the model in explaining the variation in independent variable. The coefficient of determination is between zero and one. The criteria of this method are if the result is close to one it means independent variable provide almost all the information needed to predict the variation of dependent variable, and if the result close to zero it means the variation of independent variable is limited.Regression Model AnalysisIn order to examine the research hypothesis, this research used regression models. The analysis method used to measure the correlation of the independent variable and dependent variable. Basic form of Equation Model (Yamin and Kurniawan, 2010):Y = + 1X1 + 2X2 + 3X3 + Where: Y = Dependent VariableX1 = Independent Variable1, X2 = Independent Variable2, X3 = Independent Variable3, 1, 2, 3 = Regression Coefficient, 0 = Intercept, = ErrorRegression model of independent variable and dependent variable were;(1)ROA = + 1VACA + 1VAHU + 1STVA + (2)ROA = + 1VAIC + (3)NPM = + 1VACA + 1VAHU + 1STVA + (4)NPM = + 1VAIC +

4. Analysis and DiscussionGeneral DescriptionThis research analyzes the correlation between Intellectual Capital to Company Financial Performance. Intellectual Capital Performance can be measured by using Value Added Intellectual Coefficient (VAIC) which consist of few components such as; Performance Physical Capital (VACA), Human Capital (VAHU) and Structural Capital (STVA). In order to calculate the Company Financial Performance, this research use ratio analysis and it was represented by Return on Assets (ROA) and Net Profit Margin (NPM).Even Indonesia Stock Exchange already divide the companies into many sector, but this research focused to companies on Financial Sector exclude Banking Company that listed from 2011 to 2013. Total population of this research is 126 financial statements taken from 42 companies each year from 2011 to 2013. They are Insurance Company, Financing Company, Securities Company and Other Financial Sector Company. Sampling for this research is selected by using purposive sampling method. It yields 33 companies or 99 financial statements for 3 years that fulfil the samples criteria.Classic Assumption TestIn this study data already passed the classic assumption test. First, Normality test shows data are normal distributed. Second, Data is free from multicollineariliy. It means independent variable have no correlation between other independent variable.Then, Autocorrelation Test shows there is no autocorrelation in all of model. Last of classic assumption test is heterocedasticity test. Result showed, there are no indications of heterocedasticity occurrence.Hypothesis TestingThe correlation between independent variable and dependent variable can be tested individually by using Statistical t-test. The result of statistical t-test show on following table:

Statistical t TestNO.Variablet Tablet CountSig

1ROA(Constant)VACAVAHUSTVA

1.6611.6611.661-4.48110.9622.3131.2960.0000.0000.0230.198

2ROA(Constant)VAIC

1.6611.3876.2450.1690.000

3NPM(Constant)VACAVAHUSTVA

1.6611.6611.6611.417-0.3032.0900.0660.5020.7620.0390.948

4NPM(Constant)VAIC

1.6611.5254.8870.1310.000

Source: Secondary Data from SPSS 18Table 4.8 above presented the Statistical t Test to test the correlation between each of independent variable and dependent variable to test the hypothesis. Independent variable will affect dependent variable if t-count is greater than t-table. Yamin and Kurniawan (2009) also describe it can be seen from significance (p-value). Independent variable will be assumed affect dependent variable if significance value (p-value) less than 0.05 From table above, it can be explained first, the correlation between components of intellectual capital (VACA, VAHU and STVA) to Return on Assets (ROA). The result on t-test obtained the t-count value of VACA, VAHU and STVA are 10.962, 2.313 and 1.296. Meanwhile the significance value of VACA, VAHU and STVA are 0.000, 0.023 and 0.198. T-table is obtained equals to 1.661. It means VACA and VAHU have positive affects to ROA because the t-count is bigger than t-table and the significance value is lower than 0.05. Otherwise, STVA has negative affects to ROA because t-count is smaller than t-table and significance value is higher than 0.05. So, hypothesis null (Ho) of hypothesis 1.1 and 1.2 are rejected and 3.1 is accepted. Next, the correlation of Value Added Intellectual Coefficient (VAIC) to Return on Assets (ROA) has obtained the t-count equal to 6.245. Meanwhile the significance value is 0.000. T-table is 1.661. It means VAIC have positive affects to ROA because the t-count is bigger than t-table and the significance value is lower than 0.05. So, hypothesis null (Ho) of hypothesis 4.1 is rejected. Then, statistical t-test had test the correlation between components of intellectual capital (VACA, VAHU and STVA) to Net Profit Margin (NPM). T-test obtained the t-count value of VACA, VAHU and STVA are -0.303, 2.090 and 0.066. Meanwhile the significance value of VACA, VAHU and STVA are 0.763, 0.039 and 0.948. T-table is obtained equals to 1.661. It means VACA and STVA have negative affects to NPM because the t-count is smaller than t-table and the significance value is higher than 0.05. Otherwise, VAHU has positive affects to NPM because t-count is bigger than t-table and significance value is lower than 0.05. So, hypothesis null (Ho) of hypothesis 1.2 and 3.2 are accepted and hypothesis null (Ho) of hypothesis 2.2 is rejected.Last, the correlation of Value Added Intellectual Coefficient (VAIC) to Net Profit Margin (NPM) has obtained the t-count equal to 4.887. Meanwhile the significance value is 0.000. T-table is 1.661. It means VAIC have positive affects to ROA because the t-count is bigger than t-table and the significance value is lower than 0.05. So, hypothesis null (Ho) of hypothesis 4.2 is rejected.Result and DiscussionBased on result acquired from statistic, the correlation between Intellectual Capital to Company Financial Performance show on following hypothesis testing table;Summary of Hypothesis TestHypothesisHypothesis StatementConclusion

H0 1.1Physical Capital (VACA) has no correlation to influence the company Return on Asset (ROA)Rejected

H0 1.2Physical Capital (VACA) has no correlation to influence the company Net Profit Margin (NPM)Accepted

H0 2.1Human Capital (VAHU) has no correlation to influence the company Return on Asset (ROA)Rejected

H0 2.2Human Capital (VAHU) has no correlation to influence the company Net Profit Margin (NPM)Rejected

H0 3.1Structural Capital (STVA) has no correlation to influence the company Return on Asset (ROA)Accepted

H0 3.2Structural Capital (STVA) has no correlation to influence the company Net Profit Margin (NPM)Accepted

H0 4.1Value Added Intellectual Coefficient (VAIC) has no correlation to influence the company Return on Asset (ROA)Rejected

H0 4.2Value Added Intellectual Coefficient (VAIC) has no correlation to influence the company Net Profit Margin (NPM)Rejected

Result on t-test obtained the t-count of VACA correlation to ROA is 10.962 and significance value is 0.000. The result of t-test showed VACA has positive effect to ROA because t-count is greater than t-table which is equal to 1.661 and significance value is lower than 0.05. It means hypothesis null (H0) of hypothesis 1.1 is rejected with 67.4% result of Coefficient of Determination. This result is linear to Fathi et all (2013) and Soedaryono et all (2012). So if company spent larger amount on physical capital it means it will increase the revenue that reflected on return on assets as well.In the other hand the correlation of VACA to NPM is statistically has negative effect. It was reflected on the result of t-count which equal to -0.303 and it is smaller than t-table which equal to 1.661. It also supported by the significance value is higher than 0.05 which equal to 0.762. It means the hypothesis null (H0) of hypothesis 1.2 is being accepted. So if company spent on large amount on physical capital it will increase expense and it will reduce the profit.Next, result on t-test obtained the t-count of VAHU correlation to ROA is 2.313 and significance value is 0.023. The result of t-test showed VAHU has positive effect to ROA because t-count is bigger than t-table which is equal to 1.661 and significance value is lower than 0.05. It means hypothesis null (H0) of hypothesis 2.1 is rejected with 67.4% result of Coefficient of Determination. This result is linear to Fathi et al (2013), Moradi et al (2013) and Soedaryono et al (2012). So, companys organizational routines, procedures, systems, cultures and databases can support the management in obtaining the return that reflected in return on assets as well.In the other hand the correlation of VAHU to NPM is statistically has positive effect. It was reflected on the result of t-count which equal to 2.090 and it is bigger than t-table which equal to 1.661. It also supported by the significance value is lower than 0.05 which equal to 0.039. It means the hypothesis null (H0) of hypothesis 2.2 is rejected with 20.0% result of Coefficient of Determination. So, companies spent on employees salary and other return to them will make them be efficient and effective in using cost and expense and increase the profit that will be acquired.Then, Result on t-test obtained the t-count of STVA correlation to ROA is 1.296 and significance value is 0.198. The result of t-test showed VAHU has negative effect to ROA because t-count is smaller than t-table which is equal to 1.661 and significance value is higher than 0.05. It means hypothesis null (H0) of hypothesis 3.1 is accepted. So company spent on employees salary and other return to them cant give any contribution in increasing return.In the other hand the correlation of STVA to NPM is statistically has negative effect. It was reflected on the result of t-count which equal to 0.066 and it is smaller than t-table which equal to 1.661. It also supported by the significance value that higher than 0.05 which equal to 0.948. Companys organizational routines, procedures, systems, cultures and databases cant significantly support company to reach higher profit or reduce cost that reflected on negative result of STVA correlation to NPM. It means the hypothesis null (H0) of hypothesis 3.2 is accepted. Last, result on t-test obtained the t-count of VAIC correlation to ROA is 6.245 and significance value is 0.000. The result of t-test showed VAIC has positive effect to ROA because t-count is bigger than t-table which is equal to 1.290 and significance value is lower than 0.05. It means hypothesis null (H0) of hypothesis 4.1 is rejected with 28.7% result of Coefficient of Determination. This result is in line with Suhendah (2012) and Moradi et al (2013). So, it reflected intellectual capital actually has positive correlation if company gives more amounts on it to increase the company return. In other hand the correlation of VAIC to NPM is statistically has also positive effect. It was reflected on the result of t-count which equal to 4.887 and it is higher than t-table which equal to 1.290. It also supported by the significance value is lower than 0.05 which equal to 0.000. It means the hypothesis null (H0) of hypothesis 4.2 is rejected with 19.8% result of Coefficient of Determination. So, Intellectual capital is not only has positive correlation to return but also intellectual capital can make company become more effective and efficient spent cost to increase company profit.5. Conclusion, Implication and Limitation of the StudyConclusionBased on research conducted on the effect of intellectual capital performance and their components that have been tested using regression analysis and it can be concluded that:1. Physical Capital (VACA) has positive effect on Return on Assets (ROA) for 67.4%, but it has no effect on Net Profit Margin (NPM) in financial sector Non-Banking Companies that Listed in Indonesia Stock Exchange from 2011-2013.2. Human Capital (VAHU) has positive effect on Return on Assets (ROA) for 67.4% and Net Profit Margin (NPM) for 20.0% in financial sector Non-Banking Companies that Listed in Indonesia Exchange from 2011-2013.3. Structural Capital (STVA) has no effect on Return on Assets (ROA) and Net Profit Margin (NPM) in financial sector Non-Banking Companies that Listed in Indonesia Exchange from 2011-2013.4. Intellectual capital performance that has measured by Value Added Intellectual Coefficient (VAIC) shows positive effect on Return on Assets (ROA) for 28.7% and Net Profit Margin (NPM) for 19.8% in financial sector Non-Banking Companies that Listed in Indonesia Exchange from 2011-2013.ImplicationThe implication of this study is related to management of a firm. It can be a consideration for managers to invest in intellectual capital. This study shows intellectual capital has positive effect on financial performance that measured by Return on Assets (ROA) and Net Profit Margin (NPM). So, managers can be more effective in using companys resources to increase companys performance. Another implication is for the next researcher can use this study as a reference for further research of intellectual capital and its effect to financial performance.

Limitation of the StudyFirst limitation on this study is use 99 sample only. It takes from company that categorized into financial sector non-banking companies that listed on Indonesia Stock Exchange (IDX) and from 2011 to 2013. Then, focus of this study is companys financial performance that measured by profitability ratio. While there is another ratios category that can be used, such as; liquidity ratio, leverage ratio, market ratio, or etc. Last, some of independent variable that has weak effect to dependent variable can not be explained in this research.Suggestion for Next ResearchSuggestion for next research may use the entire financial sector companies that listed on Indonesia Stock Exchange, without diversifying it into banking companies and non-banking companies. Then, next research can use other sectors, such as; information technology, transportation, service or etc, to see the effect of intellectual capital to companys financial performance. After that, next research may also use longer observation period to get more clear result regarding to the effect of intellectual capital performance on companys financial performance. Last, next research may find another factors were effected some of independent variable that have not strong enough effect to dependent variable.