THE ROLE OF PROFITABILITY IN THE FIRM VALUE MODEL (EMPIRICAL STUDY ON FOOD AND BEVERAGE COMPANIES)

Abstract The purpose of the study is to conduct an analysis and answer the research gap that occurs among researchers and the phenomenon that occurs where Firm value is a problem that needs to be researched using ROA as an intervening variable. This type of research is quantitative descriptive with multiple regression analysis method of panel data using the research object of food and beverage sector companies listed on the Indonesia Stock Exchange. By using the purposive sampling method, the number of cross sections obtained was ten companies that were observed in this study and with a time series for 5 years. Furthermore, this study produces the maximization of Firm value through profitability, ROA. This study uses an approach of two research models that are integrated into one and each through the stages of model selection testing, namely the Chow Test, Hausman Test and Lagrange Multiplier Tests. The results of the study on the first model using the endogenous variable ROA, apart from TATO and Sales Growth, all exogenous variables can explain their influence significantly on ROA with the highest level of sensitivity in the Leverage variable. The results of the second model study using Firm value as an endogenous variable are that in addition to TATO and Current Ratio, all exogenous variables can significantly explain their influence on Firm value with the highest level of sensitivity in the Leverage variable. These results are expected to help as a guideline for public companies to obtain market appreciation that is proxied into Firm value.