Analysis of Company Characteristics of Firm Values: Profitability as Intervening Variables

Abstract

This study aims to analyze the factors that influence company value (PBV) in consumer goods companies listed on the Indonesia Stock Exchange in 2014-2018. The independent variables used in the study are capital structure (DER), company size (SIZE), liquidity (CR) with profitability (ROE) as an intervening variable.The population used in this study is all companies engaged in the consumer goods sector listed on the Indonesia Stock Exchange in 2014-2018. Sampling in this study used purposive sampling which resulted in a sample of 128 consumer goods sector companies. The method used is path analysis which is the development of multiple regression and bivariate analysis.The results of this study indicate that company size and liquidity have a positive and significant effect on profitability, the capital structure has a negative and not significant effect on profitability. Profitability and company size have a positive and significant effect on firm value. Capital structure and liquidity have a positive and not significant effect on firm value. Then profitability is able to mediate the influence of company size and liquidity on firm value, but profitability is not able to mediate the influence of capital structure on firm value.

influence of capital structure, its size, growth of the value of the company with its profitability as variable intervening the company LQ45 are listed in Indonesia stock exchange

“…The study results align with the signal theory, which states that companies always give good performance signals to outsiders, especially investors. These results are in line with the results of research conducted by Chabachib et al (2020), Antoro et al (2020), Natsir & Yusbardini (2020), Tumanggor (2019), Burhanuddin & Taufik (2019), Sahbany et al (2019).…”

Capital Structure Determinant and Profitability and Their Impact on Firm Value: Study in Indonesian Manufacturing Sector

“…The result of the hypothesis testing obtained that profitability could mediate influence between capital structure and firm value in the manufacturing sector. The result of this study is not in line with the studies by (Chabachib et al, 2020). Consequently, the amount of the company's debt will directly affect firm value through the involvement of earnings generated by the company during a certain period.…”

“…The increased stock price will influence firm value. A study by (Chabachib et al, 2020) stated that profitability did not influence the correlation between capital structure and firm value.…”

Corporate Governance, Profitability, and Firm Value Study on the Indonesian Sharia Stock Index

“…The Board of Commissioner (BOC) represents the internal mechanism of GCG to control and oversee management behavior in managing the company so that it can align the interests of shareholders and company managers (Jensen & Meckling, 1976). Chabachib, Hersugondo, Ardiana, & Pamungkas(2019) said that board of commissioner is the core of GCG which is tasked with ensuring company strategy and supervising managers in managing the company, so that BOC has a very strong influence on firm value. In addition, Yacob, Jambi, Rahayu, & Jakarta(2019)andCiftci et al, (2019) also found similar results that the board of commissioners had a positive influence on firm value.…”