Year: 2025 | Month: July | Volume: 12 | Issue: 7 | Pages: 578-587
DOI: https://doi.org/10.52403/ijrr.20250761
The Effect of Profitability on Company Value in Banking Companies Listed on the Indonesia Stock Exchange
Sabrin1*, Omasrianto1, Muhammad Amir2, Muhammad Nur Afiat3, Darmono4
1Accounting Education Department, Faculty of Teacher Training and Education, Halu Oleo University,
2Public Administration Science Department, Faculty of Social and Political Sciences, Halu Oleo University, Kendari, Indonesian
3Economics and Business Department, University Muhammadiyah Berau
4Financial Management Department, Faculty of Agriculture, Fisheries and Animal Husbandry, Universitas Sembilanbelas November, Kolaka
Corresponding Author: Sabrin
ABSTRACT
This study aims to analyse the effect of profitability on firm value in banking companies listed on the Indonesia Stock Exchange from 2019 to 2023. Profitability is measured using three main indicators: return on assets (ROA), return on equity (ROE), and net profit margin (NPM). Meanwhile, firm value is measured by using the price to book value (PBV) ratio. The research adopts a quantitative approach with multiple linear regression analysis, using secondary data from the audited annual financial statements of 20 selected banking companies, based on purposive sampling criteria. The results show that ROA, ROE, and NPM have a positive and significant effect on firm value both partially and simultaneously.
Keywords: Profitability, firm value, banking, ROA, ROE, NPM
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