DEWI, MELINDA and FOANTO, GABRIELLA NATASYA and Christiawan, Yulius Jogi (2021) Profitability, Liquidity, and Firm Value: Does Financial Distress Have a Mediating Effect? (Study of Manufacturing Companies in Indonesia). [UNSPECIFIED]
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Abstract
Profitability and liquidity are essential factors in investor evaluation. The increased profitability and liquidity value reduces the risk of a company going bankrupt. This study examines the role of financial distress in the relationship between profitability and liquidity. The research looked at 170 industrial companies listed on IDX for 2016-2020. The data were analyzed using PLS (Partial Least Square). Profitability and Firm Value are perfectly mediated by financial distress, with Liquidity as the independent variable. The studys major finding is that profitability and liquidity have no direct impact on firm value, but financial distress does. Signal theory states that information about financial circumstances that are not in financial distress might encourage investors to invest, hence increasing Firm Value. This research contributes to the literature on the impact of Financial Distress in predicting the influence of Profitability and Liquidity on boosting Firm Value.
| Item Type: | UNSPECIFIED |
|---|---|
| Subjects: | H Social Sciences > HF Commerce > HF5601 Accounting |
| Divisions: | Faculty of Economic > Accounting Department |
| Depositing User: | Admin |
| Date Deposited: | 14 Mar 2022 18:23 |
| Last Modified: | 21 Aug 2023 15:48 |
| URI: | https://repository.petra.ac.id/id/eprint/19485 |
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