THE EFFECT OF PROFITABILITY AND LIQUIDITY ON COMPANY VALUE WITH CAPITAL STRUCTURE AS A MODERATING VARIABLE IN FOOD AND BEVERAGE SUB-SECTOR COMPANIES LISTED ON THE INDONESIA STOCK EXCHANGE IN THE 2023-2024 PERIOD

Abstract

This study examines the effects of profitability and liquidity on firm value and evaluates capital structure as a moderating variable in food and beverage subsector companies listed on the Indonesia Stock Exchange (IDX) during 2023–2024. The study uses secondary data obtained from annual reports, financial statements, the IDX website, and corporate websites. Purposive sampling produced 70 companies and 140 firm-year observations. Profitability is measured by return on assets (ROA), liquidity by the current ratio (CR), firm value by price-to-book value (PBV), and capital structure by the debt-to-equity ratio (DER). Panel-data regression and moderated regression analysis were performed using EViews 12. Chow and Hausman tests selected the fixed-effect model. The findings show that profitability has a positive and significant effect on firm value (coefficient = 3.590589; t = 2.020704; p = 0.0473), whereas liquidity has a negative but insignificant effect (coefficient = −0.018815; t = −0.326707; p = 0.7449). The interaction between profitability and capital structure is insignificant (t = 0.382184; p = 0.7036), as is the interaction between liquidity and capital structure (t = 0.989083; p = 0.3263). Thus, DER does not moderate either relationship. The results support signaling theory for profitability but show that liquidity and financing composition do not automatically translate into market valuation. The short two-year window, substantial firm heterogeneity, and possible fixed-effect inflation of explanatory power require cautious interpretation. Managers should emphasize asset productivity and sustainable earnings, while maintaining liquidity and leverage at operationally appropriate levels rather than assuming that higher liquidity or debt will be rewarded by investors.