Financial Ratios and Firm Size Impact on Corporate Value: Indonesian Consumer Goods Analysis

Abstract

This investigation analyzes how financial performance indicators and organizational scale influence corporate value within Indonesia's primary consumer goods sector during 2020-2023. Utilizing Indonesia Stock Exchange data, the research measures liquidity through Current Ratio (CR), solvency via Debt to Equity Ratio (DER), operational efficiency using Total Asset Turnover (TATO), profitability through Return on Assets (ROA), and firm scale via natural logarithm of total assets. Corporate value assessment employs Tobin's Q ratio. Through purposive sampling methodology, 42 companies were selected for multiple linear regression examination. Results indicate that liquidity and solvency demonstrate no significant individual impact on firm value, while operational activity and firm size exhibit significant negative effects. Profitability shows significant positive influence on corporate valuation. Collectively, all variables demonstrate significant combined effects on firm value, emphasizing the multifaceted nature of value determination in Indonesia's consumer goods industry.