The Effect of Leverage and Profitability on Firm Value with Volatility as a Moderating Variable in Indonesian Consumer Goods Companies

Alya Magfirah; Rika Dwi Ayu Parmitasari; Rusdi Raprayoga

doi:10.63922/ijebir.v5i05.6260

Alya Magfirah Management, Alauddin State Islamic University Makassar
Rika Dwi Ayu Parmitasari Management, Alauddin State Islamic University Makassar
Rusdi Raprayoga Management, Alauddin State Islamic University Makassar

DOI: https://doi.org/10.63922/ijebir.v5i05.6260

Keywords: Consumer Goods, Firm Value, Leverage, Profitability, Stock Price Volatility

Abstract

This study aims to examine the effect of leverage and profitability on firm value, with stock price volatility as a moderating variable, among Consumer Goods companies listed on the Indonesia Stock Exchange during 2020–2024. Previous studies have reported inconsistent findings regarding the relationships between leverage, profitability, and firm value, indicating the need to consider market conditions. This study employs a quantitative approach using Moderated Regression Analysis (MRA). The sample consists of six Consumer Goods companies, with financial statements and stock price data analyzed using EViews 12. The results show that leverage has a negative and significant effect on firm value, while profitability has a positive and significant effect. Simultaneously, leverage and profitability significantly affect firm value. Furthermore, stock price volatility moderates the effects of both leverage and profitability on firm value. These findings contribute to understanding the role of market conditions in strengthening or weakening fundamental factors affecting firm value.

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