The Effect of Liquidity, Firm Size, and Profitability on Firm Value: Evidence from Banking Companies Listed on the Indonesia Stock Exchange (IDX), 2019–2024

Abstract

This study was conducted on banking sector companies listed on the the Indonesia Stock Exchange for the 2019–2024 period. The research method used was a quantitative approach with an explanatory research design to analyze the effect of liquidity, firm size, and profitability on firm value. The sample consisted of banking companies selected using a purposive sampling technique based on predetermined criteria. The data used were secondary data obtained from the annual financial reports of the companies. Liquidity was measured using the Current Ratio (CR), firm size was measured using the natural logarithm of total assets, profitability was measured using Return on Assets (ROA), and firm value was measured using Price to Book Value (PBV). Data analysis was carried out using multiple linear regression analysis supported by classical assumption tests, including normality, multicollinearity, heteroscedasticity, and autocorrelation tests. The results indicated that liquidity, firm size, and profitability have an effect on firm value in banking sector companies listed on the Indonesia Stock Exchange during the 2019–2024 period.