Company Size Mediating Liquidity, Solvency, and Profitability Effects on Energy Firm Value

Abstract

This research examines company size's mediating influence on the relationship between liquidity, solvency, profitability, and firm value within Indonesia's energy sector. Employing purposive sampling, we analyzed 18 energy companies listed on the Indonesia Stock Exchange from 2019 to 2023. Data analysis utilized WarpPLS software version 8.0 for SEM-PLS analysis. Results demonstrate that liquidity, solvency, and profitability simultaneously enhance firm performance. However, profitability alone does not significantly impact firm value directly. Company size successfully mediates the relationship between profitability and organizational value. The findings suggest that larger energy companies can better transform profitability gains into enhanced market valuation, highlighting the strategic importance of asset growth in value creation within Indonesia's energy sector.