The Effect of Liquidity, Profitability, and Capital Structure on Firm Value with Firm Size as a Variable

This study investigates the influence of liquidity, profitability, and capital structure on firm value, with firm size serving as a moderating variable in financial sector companies listed on the Indonesia Stock Exchange. Liquidity is measured using the current ratio, profitability by the return on assets, and capital structure by the debt-to-equity ratio. Firm size is quantified using the natural logarithm of total assets, while firm value is determined through the price-to-book value obtained from financial statements and annual reports. Employing a quantitative research approach, the study focuses on financial sector companies listed on the Indonesia Stock Exchange. The sample comprises 57 companies selected through purposive sampling over a four-year period, resulting in 228 data points. Secondary data were collected using documentation techniques, sourcing financial reports and company annual reports from the official Indonesia Stock Exchange website (www.idx.co.id) and individual company websites. Data analysis was conducted using panel data regression analysis and moderation regression analysis (MRA) with EViews version 11. The results indicate that liquidity, profitability, and capital structure positively and significantly influence firm value, with firm size further enhancing these effects. Highlighting these findings, the study underscores practical implications for stakeholders, including investors and financial managers, in optimizing firm performance and value creation.