2019International Journal of Economics and Business AdministrationOpen access

Capital Structure and Firm Size on Firm Value Moderated by Profitability

M Hirdinis

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Abstract

The purpose of this study is to determine the effect of capital structure and firm size on firm value, moderated by profitability. The sample of this research is mining sector companies listed on IDX. This research uses the non-participant observation method with path analysis technique. The method of data analysis used is multiple linear regression with data analysis tool using SPSS 22.Based on the analysis results, it was concluded that capital structure has a significant positive effect on firm value while firm size has a significant negative effect on firm value.Profitability has no significant effect on firm value, whilst company size has a significant positive effect on profitability.However, profitability is not able to mediate the influence of capital structure and firm size on firm value.

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What this paper is about

The purpose of this study is to determine the effect of capital structure and firm size on firm value, moderated by profitability. The sample of this research is mining sector companies listed on IDX. This research uses the non-participant observation method with path analysis technique. The method of data analysis used is multiple linear regression with data analysis tool using SPSS 22.Based on the analysis results, it was concluded that capital structure has a significant positive effect on firm value while firm size has a significant negative effect on firm value.Profitability has no significant effect on firm value, whilst company size has a significant positive effect on profitability.However, profitability is not able to mediate the influence of capital structure and firm size on firm value.

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Available abstract

The purpose of this study is to determine the effect of capital structure and firm size on firm value, moderated by profitability. The sample of this research is mining sector companies listed on IDX. This research uses the non-participant observation method with path analysis technique. The method of data analysis used is multiple linear regression with data analysis tool using SPSS 22.Based on the analysis results, it was concluded that capital structure has a significant positive effect on firm value while firm size has a significant negative effect on firm value.Profitability has no significant effect on firm value, whilst company size has a significant positive effect on profitability.However, profitability is not able to mediate the influence of capital structure and firm size on firm value.

Key concepts: Profitability index, Enterprise value, Business, Value (mathematics), Capital structure, Capital call, Capital (architecture), Monetary economics

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