ANALYSIS OF THE INFLUENCE OF FINANCIAL PERFORMANCE ON VALUE OF THE FIRM WITH PROFITABILITY AS THE INTERVENING VARIABLE OF CONSUMER NON CYCLICALS - PROCESSED FOODS SUB SECTOR

Abstract

Increased production from The Processed Foods Sub Sector will have an impact on increasing investment realization obtained from domestic and foreign investment, as well as a support for economic growth in Indonesia. The greater the return of investment, the better the company's and national economy's condition. The research’s goal was to investigate the impact of liquidity, leverage, and company size on firm value, with profitability serving as an intervening variable. This research is a causal associative quantitative study on non-cyclical consumer companies listed on the Indonesia Stock Exchange in the processed foods sub-sector from 2018 to 2020, utilizing a purposive sampling technique, with 14 companies chosen as samples. This study's data processing technique makes use of the program SmartPLS 3.0. The results showed: 1) profitability was unaffected by liquidity 2) liquidity has no discernible impact on business value 3) profitability was unaffected by leverage 4) leverage has a substantial beneficial impact on business value 5) the size of the firm had no effect on profitability 6) firm size has no bearing on firm value 7) profitability has a substantial beneficial impact on business value 8) profitability has little effect on business value while liquidity is in it 9) profitability has little effect on company value when leverage is present 10) profitability has little effect on business value when firm size is small. Profitability and leverage both have a positive and considerable impact on business value. This indicates that profitability growth is an important factor that drives firm value. The bigger the company's profitability, the greater the profit and the higher the company's value, the higher the leverage value. The findings indicate that profitability and leverage have a significant impact on business value. Keywords: Liquidity; Leverage; Size; Profitability; Firm Value.