The Impact of Leverage, Profitability, and Stock Liquidity on Firm Value in the Apparel & Luxury Goods Sector

Abstract

In the apparel and luxury goods industry, leverage, profitability and stock liquidity affect firm value. Leverage, as measured by the debt-to-equity ratio, is critical to a firm's capital structure and can affect firm value through its influence on risk and expected returns. In contrast, profitability is the most direct indicator of financial performance and is often used by investors as a key benchmark for assessing a company's financial health and growth prospects. Stock liquidity, which indicates how easily a company's shares are traded in the market, is also an important factor that can affect investment decisions and firm value. This study aims to analyze the impact of leverage, profitability, and liquidity on firm value in the luxury goods and apparel sector listed on the Indonesia Stock Exchange. The research method used is a quantitative approach with multiple linear regression. The data used are secondary data obtained from the financial reports of 23 companies for the year 2023. The results show that leverage has a significant negative effect on firm value, while profitability and liquidity do not have a significant effect. It is recommended that companies manage leverage levels carefully to maintain firm value.