THE INFLUENCE OF PROFITABILITY AND LEVERAGE ON FIRM VALUE (AN EMPIRICAL STUDY ON MANUFACTURING COMPANIES LISTED ON INDONESIA STOCK EXCHANGE FROM 2020 TO 2023)

Abstract

This study aims to analyze the influence of profitability and leverage on firm value. Profitability is measured using Return on Assets (ROA), while leverage is measured using Debt to Equity Ratio (DER). Firm value is assessed using Price to Book Value (PBV). The data used in this study are secondary data from the financial statements of companies listed on the Indonesia Stock Exchange (IDX) during the period 2020-2023. Data analysis is conducted using multiple linear regression. The results show that both profitability and leverage have a positive and significant influence on firm value. These findings indicate that increases in profitability and leverage can enhance firm value. The implications of this study highlight the importance for company management to consider profitability and leverage levels as key factors in efforts to increase firm value.