The Influence of Business Risk, Financial Performance, and Debt Policy on Firm Value

Firm value reflects management performance and investor confidence, which can be influenced by business risk, financial performance, and debt policy. This study aims to analyze the effect of business risk, financial performance, and debt policy on firm value in Consumer Non-Cyclicals sector companies listed on the Indonesia Stock Exchange for the 2019–2024 period. A quantitative approach was employed using purposive sampling, yielding 396 observations from 66 companies. Data analysis was performed using panel data regression with the Fixed Effect Model via EViews 13. The results indicate that business risk, financial performance, and debt policy simultaneously have a significant effect on firm value. Partially, business risk proxied by Degree of Operating Leverage (DOL) has no significant effect on firm value. Conversely, financial performance proxied by Return on Assets (ROA) has a positive and significant effect on firm value, while debt policy proxied by Debt to Asset Ratio (DAR) shows no significant effect. This study concludes that profitability is a primary factor considered by investors in enhancing firm value.