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Original Research

ENHANCING FIRM VALUE THROUGH COMPANY GROWTH: QUANTITATIVE OF LEVERAGE AND PROFITABILITY

JOSUA PANAPAT SOEHADITAMA 1, SIGIT MARETA 2, MARIA SAFITRI 3, VICKY OKTAVIA 4, and CAROLA BASUKI 5.

Vol 19, No 09 ( 2024 )   |  DOI: 10.5281/zenodo.13752794   |   Author Affiliation: Institut Keuangan Perbankan dan Informatika Asia Perbanas, Indonesia 1; Universitas Dian Nusantara Jakarta, Indonesia 2; Universitas Dian Nuswantoro Semarang, Indonesia 3; Universitas Dian Nuswantoro Semarang, Indonesia 4; Bina Nusantara University, Jakarta, Indonesia 5.   |   Licensing: CC 4.0   |   Pg no: 252-262   |   Published on: 10-09-2024

Abstract

This research aims to investigate the relationship between company growth, leverage, profitability, and firm value. Specifically, it seeks to quantify how changes in leverage and profitability affect firm value, providing insights for managers and investors on strategies to enhance firm value through growth. The study employs a quantitative approach, utilizing financial data from a sample of companies over a specific period. The data is analyzed using statistical methods to determine the impact of leverage and profitability on firm value, measured by market capitalization or other relevant metrics. The research findings suggest that there is a significant relationship between company growth, leverage, profitability, and firm value. Higher levels of profitability and optimal leverage ratios are associated with increased firm value. The study also identifies specific strategies that companies can adopt to enhance their firm value through growth. The research is limited by the availability and quality of financial data, as well as the specific methodology employed. The findings may also be influenced by external factors such as market conditions and industry dynamics. This research contributes to the existing literature on firm value, growth, leverage, and profitability by providing empirical evidence of their interrelationships. The findings offer practical implications for managers and investors seeking to enhance firm value through strategic growth initiatives. The study's novelty lies in its quantitative analysis of the relationship between leverage, profitability, and firm value, offering new insights and empirical evidence to support decision-making in corporate finance and investment.


Keywords

Firm Value, Company Growth, Leverage, Profitability.