The Influence Of Profitability, Capital Structure, And Firm Size On Firm Value

Abstract

This study aims to identify factors that influencing firm value in the Consumer NonCyclicals sector listed on the Indonesia Stock Exchange (IDX) in 2019-2023. The independent variables used in this study include profitability as measured by return on assets (ROA), capital structure as measured by debt to equity ratio (DER), and company size as measured by the logarithm of total assets. The dependent variable used is firm value as measured by Tobin's Q ratio. This research applies a quantitative approach with descriptive and verification methods. A sample of 66 companies was determined using purposive sampling technique, which was then multiplied by the research period of five years resulting in a total of 330 data observations. The results of hypothesis testing show that the profitability variable has a positive effect on firm value. High profitability will increase firm value. Meanwhile, the capital structure and firm size variables have no effect on firm value. The capital structure and company size have no effect on firm value because investors prioritize assessing how the company manages its debt and assets to get the expected profit so as to increase company value.