The Influence of Capital Structure, Dividend Policy, and Inflation on Firm Value with Profitability as an Intervening Variable in Banking Companies Listed on the Indonesia Stock Exchange during 2019–2023

Abstract

This study aims to analyze the influence of capital structure, dividend policy, and inflation on firm value, with profitability as an intervening variable, both simultaneously and partially. The research focuses on banking companies listed on the Indonesia Stock Exchange (IDX) during the period 2019–2023. The study employs secondary data obtained from audited financial reports published on the IDX official website. A total of 35 banking companies were selected using purposive sampling. The data collection method used is documentation, supported by relevant literature including articles, journals, and financial statements. The results show that: (1) capital structure significantly affects profitability; (2) dividend policy significantly affects profitability; (3) inflation has no significant effect on profitability; (4) capital structure does not significantly affect firm value; (5) dividend policy significantly affects firm value; (6) inflation does not significantly affect firm value; (7) profitability significantly affects firm value; (8) there is no indirect effect of capital structure on firm value through profitability; (9) there is no indirect effect of dividend policy on firm value through profitability; and (10) there is no indirect effect of inflation on firm value through profitability. These findings provide insights for financial managers and policymakers in improving firm value through internal financial decisions, particularly in the banking sector.