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The Relationship Between Profitability and Firm Value: Evidence From Manufacturing Industry in Indonesia

Bambang Sudiyatno, Elen Puspitasari, Ida Nurhayati and Tristiana Rijanti

International Journal of Financial Research, 2021, vol. 12, issue 3, 466-476

Abstract: This study aims to test whether profitability acts as a moderating variable that is able to moderate the influence of the company growth and capital structure on the firm value. The independent variables used in this study are company growth and capital structure, while profitability is the moderating variable. The research sample was taken from manufacturing industrial companies listed on the Indonesia Stock Exchange (IDX) during the period 2016 - 2018. The study used panel data which is a combination of cross section and time series data, with data analysis using multiple regression. The results showed that company growth and profitability had a positive effect on the firm value, while capital structure had does not effect. The results of the analysis show that profitability does not moderate the effect of company growth and capital structure on the firm value, the interaction of company growth and capital structure with profitability has a negative impact on the firm value.

Keywords: company growth; capital structure; profitability; firm value (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:jfr:ijfr11:v:12:y:2021:i:3:p:466-476

DOI: 10.5430/ijfr.v12n3p466

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