THE EFFECT OF PROFITABILITY AND SOLVABILITY ON COMPANY VALUE IN BANKING SECTOR COMPANIES

Abstract

This research aims to analyze the effect of profitability and solvency on the value of banking companies listed on the Indonesia Stock Exchange for the 2021-2023 period. The study employs a descriptive method with a population of 46 banking companies. A total of 41 companies were selected as samples based on the criteria of continuously publishing audited financial or annual reports during the study period. The results indicate that profitability and solvency, both individually and simultaneously, have a positive and significant impact on company value. High profitability reflects a company's ability to generate profits and attract positive investor perceptions, while good solvency enhances investor confidence through effective management of long-term liabilities. The strong performance of these two factors contributes to financial stability, strengthens corporate reputation, and drives an increase in company value