The Effect of Capital Structure, Profitability on Firm Value with Interest Rates as Moderating Variable

Abstract

The purpose of this study is to analyze the effect of liquidity on firm value, and the effect of profitability as a moderating variable between liquidity and firm value in the company. The population in this study are manufacturing companies in the consumer goods industry, the food and beverage sub-sectors, and also cigarette sub-sectors. The population of this study was food and beverage and cigarette sub-sector companies listed on the Indonesia Stock Exchange (IDX) in the period 2016 to 2020. The sampling technique used the purposive sampling method so that the total sample obtained was 90 companies for 5 years. The results of this study prove that liquidity affects firm value, and profitability does strengthen or weaken the effect of the firm value. Based on the results of this study proves that companies that have a high level of liquidity are able to use their current asset. So, that it will be increase their performance and it will be easier to get funding from investor and companies with high profitability are able to generate satisfying profits, so that they will get large investment opportunities and also will increase firm value.