The Influence of Liquidity and Solvency on Company Value Mediated by Profitability (A Study on the Raw Material Sector Listed on the Indonesia Stock Exchange)

Abstract

This study aims to analyze the effect of liquidity and solvency on firm value with profitability as a mediating variable in the raw materials sector listed on the Indonesia Stock Exchange. The study uses a causality design with a population of 15 companies and a sample of 7 companies determined through purposive sampling. Secondary data were collected from March 2025 to June 2026 through the Investment Gallery of the Indonesia Stock Exchange at Mercu Buana University, Jakarta. The results show that liquidity and solvency do not affect firm value, while profitability has a positive effect. Furthermore, liquidity has a significant negative effect on profitability, while solvency has a negative effect on profitability. Meanwhile, liquidity indirectly has a negative effect on firm value with profitability as a mediating variable, and solvency indirectly has a negative effect on firm value with profitability as a mediating variable