The Effect of Financial Policy on Firm Value with Profitability as a Moderating Variable
Wahyu Nugroho *
Department of Accounting, Faculty of Economics, Sekolah Tinggi Ilmu Ekonomi Indonesia (STIESIA), Indonesia.
Wahidahwati
Department of Accounting, Faculty of Economics, Sekolah Tinggi Ilmu Ekonomi Indonesia (STIESIA), Indonesia.
Suwardi Bambang Hermanto
Department of Accounting, Faculty of Economics, Sekolah Tinggi Ilmu Ekonomi Indonesia (STIESIA), Indonesia.
*Author to whom correspondence should be addressed.
Abstract
This research aims to examine and analyze the effect of financial policy on firm value with profitability as a moderating variable. The study applies quantitatively. Furthermore, the population consists of LQ-45 companies listed on the Indonesia Stock Exchange (IDX) during 2020-2022. The data collection technique used saturated sampling. In line with that, there were 45 companies as the sample. Therefore, 135 total samples were analyzed. Moreover, the data analysis technique used multiple linear regression and interaction test of Moderated Regression Analysis (MRA) with SPSS 25. The research shows that both investment decisions (PER), operational decisions (TATO), and profitability (ROA) have a positive effect on the firm value of LQ-45 companies listed on IDX during 2020-2022. Funding decisions have a negative effect on the company value of LQ-45 companies listed on the IDX during 2020-2022. In addition, profitability (ROA) moderates the effect of investment decisions (PER), funding decisions (DER), and operational decisions (TATO) on the firm value (PBV) of LQ-45 companies listed on IDX during 2020-2022.
Keywords: Financial policy, investment decisions, funding decisions, operational decisions, profitability, firm value