THE EFFECT OF LIQUIDITY, SOLVABILITY, ACTIVITY, AND PROFITABILITY RATIO ON FIRM VALUE (Study in Food and Beverage Companies Listed at Indonesia Stock Exchange)

Abstract

The firm value can deliver maximum shareholder wealth if the stock price increases. The higher the stock price of a company, the higher the shareholder wealth. The firm value is a reflection of the addition of several firms with debt equity firms. Several factors influence the firm value, some of which are liquidity ratios, leverage, activity, and profitability. The purpose of this study was to determine the effect Liquidity Ratio, Leverage, Activity, and Profitability on Firm Value. This study discussed the effect of liquidity, leverage, activity, and profitability on  firm  value.  The  research  study  was  conducted  on  food  and  beverage  companies  listed  at Indonesia Stock Exchange in the 2014-2018 period. The population in this study were food and beverage  companies  listed  on  the  Indonesia  Stock  Exchange  during  the  2014-2018  period. Purposive  sampling  technique  was  employed  to  select  population.  The  number  of  samples obtained was 20 companies. Data were analysed using multiple linear regression methods. The results  show  that  the  ratio  of  liquidity,  leverage,  activity,  and  profitability  has  positive  and significant effect to the company's value.