The Effect of Profitability on Firm Value with Intellectual Capital as an Intervening Variable in Manufacturing Companies Listed on the Indonesia Stock Exchange

Abstract

The “objective of this study is to investigate the effect of profitability on firm value with intellectual capital as an intervening variable in manufacturing companies listed on the Indonesia Stock Exchange. The population are manufacturing companies that have published Corporate Governance Reports until 2018. However, some companies do not publish regularly during the observation period from 2012 to 2018. This study uses population requirements, companies do not issue Corporate Governance Reports for a maximum of 1 year. In order to obtain a population of 14 companies, all of which were used as research samples (saturated samples) with 98 observations. The analysis method used path analysis. The results demonstrated that profitability has a direct effect on firm value and profitability has an indirect effect on firm value. Intellectual capital acts as a mediating variable in this relationship. The increase in intellectual capital has an impact on increasing the value of the company. In addition, profitability can improve company performance and corporate image internally and externally, thereby increasing investor confidence, and companies have the opportunity to increase intellectual capital. The increase in intellectual capital has an impact on increasing the value of the” company.

The Effect of Company Growth and Liquidity on Company Value with Capital Structure as an Intervening Variable

“…This result is not in accordance with signal theory where companies that have the ability to fulfill their obligations will receive a positive signal because they can provide guarantees for future prospects. The results of this study are in accordance with the findings of Aslindar & Lestari (2020), Iman et al (2021, Afinindy et al (2021) and Pertiwi et al (2022).…”

“…The results of the second hypothesis research partially show that the -tcount>-ttable value is -3.1656 > -2.0066 and the significance value is 0.0026 <0.05, which means the hypothesis is accepted. The research results are in line with Dewiningrat & Mustanda (2018), Deviani & Sudjarni (2018), Uli (2020), Afinindy et al (2021) and Pertiwi et al (2022) which states that liquidity has a negative influence on capital structure. The current ratio is used to assess whether or not a company is able to pay all its obligations, so that it can attract investors to invest.…”

“…Previous researchers Yanti & Darmayanti (2019), N. Dewi et al (2018), IAPT Dewi & Sujaya (2019) and Widayanthi & Sudiartha (2018) have examined the relationship between liquidity and company value and found that there is an influence. However, different results were found by Aslindar & Lestari (2020), Iman et al (2021), Afinindy et al (2021) and Pertiwi et al (2022) who found that there was no effect of liquidity on company value.…”

“…However, different results were obtained by Wijaya (2019), Isnawati & Widjajanti, (2019) and Afinindy et al (2021) where company growth has no effect on company value through capital structure. Research conducted by N. Dewi et al (2018), Aslindar & Lestari (2020) and Pertiwi et al (2022) liquidity influences company value through capital structure as an intermediary variable, while different research results from Rahmatullah (2019), Uli (2020) and Hamdani et al (2022) argue that liquidity cannot influence company value through capital structure.…”

Firm Size, Leverage, Liquidity, and Profitability Effect on the Disclosure of Carbon Emissions

“…Liquidity can also be referred to as the ability used by individuals or companies to carry out tasks that must be completed immediately and paid for with their current assets. The liquidity ratio describes the company's ability to meet short-term needs (Thaib and Dewantoro, 2017). Liquidity presents the ability of a company to meet the needs of money that must be paid immediately, or the ability of a company to meet the needs of money when billed.…”