COVID-19: really weakening the effect of financial performance on corporate value of consumer cyclicals?

Covid-19 is a disease outbreak that affects company performance and value. This study aims to test whether Covid-19 can strengthen the effect of financial performance on firm value. Financial performance is proxied by financial ratios consisting of the Current Ratio (CR), Debt to Asset Ratio (DAR), and Return on Assets (ROA). Meanwhile, the Company Value is proxied by Tobin” Q. The Cyclical Consumer Sector is the population of this study. Purposive Sampling is the sample selection method used. Twenty-eight companies meet the criteria. The data processed is quarterly from 2017 to 2021, so the number of observations is four hundred and twenty. The study results show that only DAR and ROA affect firm value and that Covid-19 is a quasi-moderating and strengthening effect of ROA on firm value. The novelty of this study is that Covid-19 is treated not as an independent variable but as a moderating variable, and the data is quarterly. The results of this study have implications for companies to be able to anticipate the arrival of disease outbreaks because it dramatically affects the performance and value of the company. The influence of this plague can be debilitating or strengthening.