Home / Vol. 1 - No. 3 / Article

THE INFLUENCE OF FIRM SIZE, LEVERAGE, PROFITABILITY, AND CAPITAL STRUCTURE ON FIRM VALUE IN INDUSTRIAL SECTOR COMPANIES LISTED ON THE INDONESIA STOCK EXCHANGE DURING THE 2020–2024 PERIOD

Abstract

This study aims to evaluate the impact of firm size, leverage, profitability, and capital structure on firm value within industrial sector entities listed on the Indonesia Stock Exchange for the 2020–2024 fiscal period. In this research, firm value is operationalized through Tobin’s Q, while the independent variables are quantified using the natural logarithm of total assets (SIZE), the Debt-to-Equity Ratio (DER), Return on Assets (ROA), and the Debt-to-Asset Ratio (DAR). Adopting a quantitative approach, this study examines longitudinal secondary data to determine the drivers of corporate value. Through a selective purposive sampling technique, 17 companies were identified from a broader population of 67 industrial firms. Following the validation of the model via classical assumption diagnostics, multiple linear regression analysis revealed that all independent variables (size, leverage, profitability, and capital structure) significantly enhance firm value. The data suggests that from an investor's perspective, robust internal performance and effective resource allocation are primary catalysts for increasing a firm's Tobin’s Q or market standing.