Rina Sumarni, Fanlia Prima Jaya, Diana, Rezti, Arfie Yasrie

The Effect of Capital Structure, Liquidity, and Asset Efficiency on Company Value

Introduction

The effect of capital structure, liquidity, and asset efficiency on company value . Analyze the effects of capital structure, liquidity, and asset efficiency on company value. Capital structure hurts value, while liquidity and asset efficiency boost it. Optimize finances.

Abstract

Increasing economic uncertainty, fluctuations in interest rates, and evolving business dynamics have compelled companies to optimize their financial policies to enhance company value. This study aims to examine the effects of capital structure, liquidity, and asset efficiency on company value. Employing a quantitative approach with a causal-associative research design, this study utilizes secondary data obtained from the company’s annual financial statements covering the period of 2015–2024. The variables examined include capital structure, liquidity, and asset efficiency as independent variables, while company value serves as the dependent variable. Data were analyzed using multiple linear regression with the assistance of SPSS version 25, following a series of classical assumption tests. The findings indicate that capital structure has a significant negative effect on company value, whereas liquidity and asset efficiency have significant positive effects on company value. Furthermore, the three independent variables simultaneously exert a significant influence on company value and collectively explain a substantial proportion of its variation. These results suggest that maintaining an optimal financing structure, preserving adequate liquidity, and improving asset utilization efficiency are essential for enhancing long-term company value and competitiveness.

Review

This paper addresses a highly pertinent topic in corporate finance, investigating the impact of capital structure, liquidity, and asset efficiency on company value amidst prevailing economic uncertainties and dynamic business environments. The study's objective is clearly articulated, aiming to quantitatively assess these relationships. Adopting a causal-associative research design, the authors leverage a robust dataset comprising secondary data from annual financial statements spanning 2015 to 2024. The analytical framework correctly identifies capital structure, liquidity, and asset efficiency as independent variables, with company value serving as the dependent variable, providing a clear scope for the inquiry. Methodologically, the choice of multiple linear regression, aided by SPSS version 25 and preceded by classical assumption tests, is appropriate for examining the hypothesized relationships between these financial variables and company value. The findings offer valuable insights: capital structure is reported to have a significant negative effect on company value, suggesting that excessive reliance on debt or suboptimal equity configurations can erode shareholder wealth. Conversely, both liquidity and asset efficiency are shown to exert significant positive effects, underscoring their importance in enhancing financial health and operational performance. Furthermore, the combined significant influence of all three independent variables, explaining a substantial proportion of the variation in company value, indicates a comprehensive interplay between these critical financial dimensions. The practical implications derived from this study are substantial for corporate managers and financial strategists. The results strongly advocate for maintaining an optimal financing structure, ensuring adequate liquidity, and continuously striving for improved asset utilization efficiency as essential pillars for enhancing long-term company value and competitive advantage. This research contributes meaningfully to the existing body of knowledge by reinforcing established financial theories with contemporary data, particularly in the context of increasing economic volatility. While the abstract provides a compelling overview of the study's scope and findings, future research could potentially explore these relationships within specific industry sectors or geographical contexts, or incorporate additional control variables to further enrich the model's explanatory power.

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