The Influence of Firm Size, Profitability, and Leverage on Firm Value (in Mining Companies Listed on the Indonesia Stock Exchange, 2023–2025)

Abstract

Although the determinants of firm value have received considerable scholarly attention, evidence regarding the effects of firm fundamentals in the volatile mining sector during the dynamic 2023–2025 post-pandemic period remains inconclusive. This study aims to analyze the effects of firm size, profitability, and leverage on the firm value of mining companies listed on the Indonesia Stock Exchange. A quantitative approach with a causal-associative design was employed, involving 25 mining companies selected through purposive sampling. Data were collected from audited financial statements using documentation techniques and analyzed using multiple linear regression. The findings indicate that firm size has no significant effect on firm value, whereas profitability has a significant positive effect and leverage has a significant negative effect. These results contribute to the application of Signalling Theory in explaining firm value and extend current understanding of capital structure management in capital-intensive industries. The study concludes that profitability and prudent debt management are more consequential for firm value than firm size, highlighting the importance of operational efficiency and appropriate financing decisions in enhancing shareholder wealth. The findings provide theoretical implications for the financial management literature and practical implications for corporate managers and investors in formulating capital structure strategies and mitigating portfolio risks. Future research may extend the analysis to broader real-sector industries and incorporate macroeconomic or environmental, social, and governance (ESG) variables.