EVALUATING HOW PROFITABILITY, GROWTH, AND SIZE INFLUENCE COMPANY VALUE

Abstract

This study aims to examine the impact of profitability, company growth, and company size on the value of consumption sector firms from 2019 to 2022. The research will utilize panel data regression analysis through the EViews application. Profitability will be measured using Return on Assets (ROA), company growth will be assessed by the percentage change in asset value, company size will be represented by the natural logarithm of total assets, and company value will be measured using the Price-to-Book Value (PBV) ratio. The findings from the Chow test indicate a Cross Section Chi
square value of 0.000, while the Hausman test shows a random Cross Section probability value of 0.0001. Consequently, the fixed effect model will be employed for the panel data regression analysis. Results from this model reveal that profitability does not significantly impact firm value, while company growth and size both exhibit an insignificant negative relationship with firm value.