Moderation of Good Corporate Governance Governance: Impact of Profitability on Company Value in the Financial Sector in Indonesia

Abstract

The increase in company value is a success that meets shareholders' expectations, because the increase in company value makes shareholders feel more prosperous. The company's high value, resulting in high stock market prices. The goal of this research is to show that profitability and good corporate governance (GCG) have an effect on firm value. In addition, to see if GCG can reduce the impact of profitability on firm value. Furthermore, to see if GCG can mitigate the effect of profitability on firm value. Return on assets is a profitability indicator, whereas GCG indicators include institutional ownership, the number of directors, and the ratio of independent commissioners. This study uses a population of 83 companies. This research uses a population of 83 companies, including 42 banking companies, 14 financial companies, 12 securities companies, and 15 insurance companies. Methods of data collection include literature review and documentation. The SPSS version 25 program was used for data analysis, which included multiple regression and the residual test. The findings of this research indicate that only the number of directors has a significant effect on firm value and GCG is shown as an independent variable. The research's implications will be to help management apply GCG principles more effectively.