August 11, 2025

The Influence of Liquidity and Capital Structure on Company Value with Profitability as a Mediator

Key Points

Liquidity and capital structure affect company value directly, but profitability does not serve as a mediator in this context.
The analysis revealed that despite strong theories, profitability failed to significantly influence the relationship between liquidity and company value.
A quantitative causality approach was employed, analyzing data from companies in the basic and chemical industries in Indonesia.
These findings imply complexities in financial dynamics and the necessity for further research on profitability's role in value generation.

Abstract

This study aims to develop a theoretical concept to address the gap in the impact of liquidity and capital structure on the value of the Company by using the signal theory approach and capital structure theory through the mediation of profitability which is expected to contribute to increasing the value of the company. This study is a quantitative causality study because it explains the causal relationship between the independent variables (liquidity and capital structure) with the dependent variable (Company value) and the intervening variable (profitability). The population of this study is companies in the basic and chemical industries listed on the Indonesia Stock Exchange from 2016-2022. The results of the study indicate that profitability cannot mediate the effect of liquidity on company value in the basic and chemical industry sectors in the period 2016-2022

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Cite This Study

Indyyati et al. (Mon,) studied this question.

synapsesocial.com/papers/68a360e00a429f797332926d https://doi.org/https://doi.org/10.55927/ijems.v3i3.81

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