The effect of business risk, profitability, current ratio on firm value: debt policy as a mediating variable: Case study of mining companies listed on the Indonesia Stock Exchange

Sutha Arjuna; Marlina Widiyanti; Kemas Muhammad Husni Thamrin; Mukhtarudin Mukhtarudin

doi:10.21744/ijss.v8n1.2356

Authors

Sutha Arjuna Sriwijaya University, Palembang, Indonesia
Marlina Widiyanti
marlinawidiyanti@fe.unsri.ac.id
Sriwijaya University, Palembang, Indonesia
Kemas Muhammad Husni Thamrin Sriwijaya University, Palembang, Indonesia
Mukhtarudin Sriwijaya University, Palembang, Indonesia

Keywords:

business risk, debt, firm value, profitability

Abstract

This study aims to examine the effects of Business Risk, Current Ratio, and Profitability on Firm Value with Debt to Equity Ratio as a mediating variable. Using purposive sampling, 25 mining companies listed on the Indonesia Stock Exchange during 2019-2023 were analyzed, resulting in 125 data points. The results show that CR negatively affects DER, ROA, CR, and DER positively affect FV, and DER has no mediating effect. This study highlights Debt policy, capital structure, and profitability significantly influence firm value, as these factors determine the company's financial stability, operational efficiency, and ability to create shareholder wealth.

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