Determinant of Firm Value with Profitability as an Intervening Variable in Digital Banks

Abstract

This study aims to analyse the influence of firm size, leverage, and liquidity on firm value, with profitability as an intervening variable, focusing on digital banks registered with the Financial Services Authority (OJK) during the period 2021–2023. A quantitative research approach was employed using path analysis techniques. The sample was selected through purposive sampling, resulting in seven digital banking companies that met the study criteria. The results indicate that leverage and liquidity have a significant effect on firm value. Firm size and profitability do not have a significant effect on firm value. Firm size, leverage, and liquidity also do not significantly influence profitability. Profitability does not function as a mediating variable between the independent variables and firm value.

Keywords: PBV, ROA, Natural logarithm of total assets, DAR, LDR