THE ROLE OF PROFITABILITY IN MEDIATING CAPITAL STRUCTURE, AND FIRM SIZE ON FIRM VALUE MEDIATED BY PROFITABILITY

Sajiwo Tri Prakoso Sajiwo Tri Prakoso,Nur Amalina Nur Amalina,Civi Erikawati Civi Erikawati,Chandra Wisnu Utomo Chandra Wisnu Utomo,Diana Pramudya Wardhani Diana Pramudya Wardhani

doi:10.53625/ijss.v1i5.1326

Sajiwo Tri Prakoso Sajiwo Tri Prakoso, Nur Amalina Nur Amalina + Show 3 more

Open Access

https://doi.org/10.53625/ijss.v1i5.1326

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Abstract

This study aims to examine the effect of capital structure and firm size on profitability and firm value. The total population and sample are 32 real estate property companies listed on the Indonesia Stock Exchange. The data is taken from secondary data listed on the IDX from the financial statements of www.idx.com. The data analysis technique in this study used multiple regression analysis and was expanded with path analysis. From the results of regression testing, it can be concluded as follows: Capital structure has a negative and significant effect on profitability, while firm size has a positive and significant effect on profitability. Partially, capital structure and profitability have a positive and significant effect on firm value, while firm size has a negative and insignificant effect. Profitability has a positive and significant effect on firm value. Profitability as an intervening variable does not mediate the relationship between capital structure and firm size with firm value shown from t arithmetic which is smaller than t table Sobel test.

Highlights

In this modern era, human needs are limited to meeting basic needs, and extend to secondary needs that can support their activities and welfare, such as the need for vehicles, electronic goods, and travel
This study aims to examine the effect of capital structure and firm size on profitability and firm value
Profitability as an intervening variable does not mediate the relationship between capital structure and firm size with firm value shown from t arithmetic which is smaller than t table Sobel test

Summary

Introduction

Human needs are limited to meeting basic needs, and extend to secondary needs that can support their activities and welfare, such as the need for vehicles, electronic goods, and travel. Companies that are members of various industrial sectors on the Indonesia Stock Exchange (IDX) are engaged in industries that support these needs. The various industrial sectors referred to in this study are one industrial sector listed on the IDX.

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