Investigating the Effect of Financial Performance on Firm Value with the Board of Directors as a Moderating Variable

The development of the industrial world is currently very rapid, as seen from the increasingly competitive company competition (Aminda et al., 2022).The intense world business competition has pushed many organizations to succeed in achieving their goals of establishing a company.The population in Indonesia is increasing.Based on Central Bureau Statistics shows that an increase in population every year by 1% will affect economic growth.Apart from that, the increase in food and beverage will increase.The business sector in the food and beverage industry contributes to the country's economy (Tezar, 2020).A manufacturing company transforms raw materials into finished products.These companies interact with both people and the environment, meaning their activities are visible to both internal and external stakeholders (D. Puspita & Muchran, 2023).The main aim of any manufacturing company is to earn profits and build wealth for its owners or shareholders.To reach this aim, they need to enhance their overall value.The share price of the company, determined by the forces of supply and demand in the capital market, represents the firm's value, which indicates the public's evaluation of the company's performance (Dwi et al., 2022).Higher stock prices increase investor opinion of a company's success rate.The companies who use the strategy of going public on the Indonesia Stock Exchange aim to increase their firm value by using financial performance.When a company shares more information, investors feel more confident since there is less hidden information to be concerned about.The effectiveness of a company is the achievement that the company wants to achieve, which is usually shown by good firm values.Investors or users of financial reports can see whether the company's operations in managing assets, liabilities, and equity have gone well by looking at the company value displayed by them.In general, to assess a company's good or bad value, financial report users use the same method to assess its financial performance (Srie Yuniawati et al., 2023).Based on IDN Financials, PT Indofood CBP Sukses Makmur Tbk in the post-pandemic years experienced inflation, geopolitical tensions (such as the Russia-Ukraine war), and rising commodity prices such as wheat, sugar, palm oil, and other raw materials causing increased production costs and profit margins pressures.In addition, the occurrence of changes in consumer behavior and a decrease in demand is a matter of concern to the company.This is a challenge for companies to maintain profitability by the price of their products or experience a decrease in profit margins which can be an influence on the company's financial performance and firm value.Firm value is an essential metric that indicates the total worth of a company, commonly referenced by investors, shareholders, and management to gauge a company's valuation.This study aims to assess the effect of financial performance on firm value, considering the board of directors as a moderating factor in the food and beverage manufacturing industry of firms listed on the Indonesia Stock Exchange during the period of 2020 to 2023.The research utilized purposive sampling, gathering a total of 140 data points for the analysis.PLS software was employed for data examination.The findings indicated a positive and significant relationship between financial performance and firm value, while the board of directors was found to have no moderating effect on this relationship.