The Effect of Liquidity and Leverage on Company Value with Profitability as a Mediation Variable (Study on the Property and Real Estate Sector Listed on the Indonesia Stock Exchange)

Abstract

The property and real estate sectors were chosen as the object of research because despite being one of the contributors to Gross Domestic Product, the value of companies in this sector has decreased. This study aims "to analyze the influence of liquidity and leverage on company value with profitability as a mediating variable." The study used a causality design with a sample of 7 companies taken through purposive sampling from 78 companies listed on the IDX. The analysis was carried out using panel data regression. The findings confirm that liquidity, leverage, and profitability have a significant positive effect on company value. Liquidity has no effect on profitability, while leverage has a significant negative effect on profitability. Profitability does not mediate the effect of liquidity, but mediates the effect of leverage on company value negatively.