Based on sample data sourced from the company's financial reports published on the IDX website from 20121 to 2024, a description of the variables used in this study was obtained. The description of this data can be seen from the number of samples, minimum value, maximum value, average value, and standard deviation.
Table 2. Descriptive Statistics
| N | Minimum | Maximum | Mean | Std. Deviation | |
|---|---|---|---|---|---|
| Leverage | 52 | 0.03 | 35.00 | 1.8892 | 6.09152 |
| Likuiditas | 52 | 0.64 | 18.83 | 3.1408 | 3.32572 |
| Profitabilitas | 52 | 0.03 | 26.99 | 6.9362 | 5.09845 |
| Nilai Perusahaan | 52 | 0.37 | 56.28 | 7.1469 | 10.60552 |
| Valid N (listwise) | 52 |
The t-statistic test is utilized to assess the extent to which each independent variable individually contributes to explaining the variation in the dependent variable. In interpreting the coefficient estimates of the independent variables, unstandardized coefficients are typically referenced. The decision criteria for this test rely on the significance probability value (sig-t). If the sig-t value is below the 5% threshold, it indicates that the independent variable significantly influences the dependent variable, thereby supporting the proposed hypothesis. Conversely, if the sig-t value exceeds 5%, it implies that the independent variable does not exert a statistically significant effect on the dependent variable, leading to the rejection of the hypothesis due to insufficient empirical support.
T Test Equation I
Table 3. T Test Equation I
Dependent Variable: Profitabilitas
| Model | Unstandardized Coefficients | Standardized Coefficients |
t | Sig. | ||
|---|---|---|---|---|---|---|
| B | Std. Error | |||||
| 1 | (Constant) | 2.028 | .679 | 2.989 | .004 | |
| Leverage | .742 | .268 | .352 | 2.772 | .008 | |
| Likuiditas | .408 | .191 | .272 | 2.140 | .037 | |
The decision-making criterion in the t-test states that if the calculated t- value exceeds the critical value from the t-distribution table, then the independent variable has a partial effect on the dependent variable. Referring to the t-distribution table at a 0.05 significance level, the corresponding critical value is 2.009. Based on the results presented in the table above, the interpretation of the t-test outcomes for the first regression equation is as follows:
The leverage variable, as measured by the Debt to Equity
Ratio (DER), yields a calculated t-value of 2.772, which
exceeds the critical t-value of 2.009, with a significance
level of 0.008, which is below the 0.05 threshold. These
results provide statistical evidence to support the
acceptance of hypothesis H3, indicating that leverage (DER)
has a significant influence on profitability (ROA).
The liquidity variable, represented by the Current Ratio
(CR), shows a calculated t-value of 2.140, surpassing the
critical t-value of 2.009, with a significance level of
0.037, also less than 0.05. This finding supports the
acceptance of hypothesis H4, confirming that liquidity (CR)
significantly affects profitability (ROA).
T Test Equation II
Table 3. T Test Equation II
Dependent Variable: Company's Value
| Model | Unstandardized Coefficients | Standardized Coefficients |
t | Sig. | ||
|---|---|---|---|---|---|---|
| B | Std. Error | |||||
| 1 | (Constant) | .672 | .802 | .837 | .407 | |
| Leverage | .283 | .313 | .117 | .903 | .371 | |
| Likuiditas | -.043 | .217 | -.025 | -.198 | .844 | |
| Profitabilitas | .604 | .155 | .524 | 3.888 | < .001 | |
The decision rule for the t-test states that if the computed t-value exceeds the critical value from the t-distribution table, the independent variable has a partial effect on the dependent variable. At a 5% significance level, the corresponding t-table value is 2.010. Based on the results shown in the table above, the interpretation of the t-test for the second regression equation is as follows:
The leverage variable (DER) has a t-statistic of 0.903,
which is less than the critical value of 2.010, and a
p-value of 0.371, which is greater than 0.05. These results
indicate that hypothesis H1 is rejected, suggesting that
leverage does not have a statistically significant impact on
firm value (PBV).
The liquidity variable (CR) produces a t-value of -0.198,
also lower than the critical value of 2.010, with a
significance level of 0.844, exceeding the
0.05 threshold. Therefore, hypothesis H2 is rejected, indicating that liquidity does not significantly influence firm value (PBV).
The profitability variable (ROA) shows a t-value of
3.888, which surpasses the critical value of 2.010, with a
highly significant p-value of <0.001. As a result,
hypothesis H5 is accepted, confirming that profitability has
a significant positive effect on firm value (PBV).
In this study, the Sobel test, also referred to as the mediation analysis, is employed to examine the indirect influence of the independent variables, namely leverage and liquidity, on the dependent variable, firm value, through the mediating role of profitability. This analysis is conducted on companies operating within the technology sector and listed on the Indonesia Stock Exchange (IDX) during the observation period from 2021 to 2024. Based on the results of the regression analysis, this study obtained the coefficient values and standard errors of the leverage (DER) and liquidity (CR) regression coefficients in the profitability (ROA) regression model and the coefficient values and standard errors of the profitability (ROA) regression coefficients in the firm value (PBV) regression model as follows:
Table 4. Sobel Test Result
| Variable | ROA Regression Model | PBV Regression Model | ||
|---|---|---|---|---|
| Koefisien Regresi | Standard Error | Koefisien Regresi | Standard Error | |
| DER | 0.742 | 0.268 | ||
| CR | 0.408 | 0.191 | ||
| ROA | 0.604 | 0.155 | ||
The following section outlines the indirect effects of the independent variables on the dependent variable through the mediating variable:
The Effect of Leverage on Firm Value Mediated by
Profitability
The Sobel test is utilized to assess the significance of the mediating effect; however, the z-score required for interpretation is not directly available from the regression output and must be calculated manually using the Sobel test formula. The resulting z-value derived from this calculation is as follows:
𝑎𝑏
𝑧 =
√(𝑏2𝑆𝐸𝑎2) + (𝑎2𝑆𝐸𝑏2)
0,742 x 0,604
𝑧 =
√((0,604)2(0,268)2) + ((0,742)2(0,155)2)
0,448
𝑧 =
√0,039 0,448
𝑧 = 0,197
𝑧 = 2,477
Referring to the calculation presented above, the obtained z-score is 9.384. Since this value exceeds the critical threshold of 1.96 at the 5% significance level (z = 2.477 > 1.96), it can be concluded that the profitability variable effectively mediates the relationship between leverage and firm value. An alternative approach to assessing this mediating effect is through the Sobel test. The outcomes derived from the Sobel test analysis are described in the following section:
Based on the tests conducted, namely the z test and the sobel test. The z test obtained a z value of 2.477> 1.96 with a significance level of 5%, while the sobel test obtained a significance value of 0.024 <0.05. From the tests conducted above, it can be concluded that profitability is able to mediate the indirect effect between leverage and company value. These results indicate that H6 is accepted.
The Effect of Liquidity on Firm Value Through
Profitability
The z-score for the Sobel test is not directly available from the regression output and must be computed manually using the Sobel test formula. The results of the z value calculation of the Sobel test are:
𝑎𝑏
𝑧 =
√(𝑏2𝑆𝐸𝑎2) + (𝑎2𝑆𝐸𝑏2)
0,408 x 0,604
𝑧 =
√((0,604)2(0,191)2) + ((0,408)2(0,155)2)
0,246
𝑧 =
√0,017 0,246
𝑧 =
0,130
𝑧 = 1,892
The result of this manual calculation produces a z-value of 1.892. Since this value falls below the critical threshold of 1.96 at the 5% significance level, it indicates that the profitability variable does not serve as a significant mediator in the relationship between liquidity and firm value. An alternative method for assessing mediation is the Sobel test, and the findings from this analytical procedure are presented as follows:
Based on the tests conducted, namely the z test and the sobel test. The z test obtained a z value of 1.892 <1.96 with a significance level of 5%, while the sobel test obtained a significance value of 0.067> 0.05. From the tests conducted above, it can be concluded that profitability is unable to mediate the indirect effect between liquidity and company value. These results indicate that H7 is rejected.
The results of the regression analysis indicate that the leverage coefficient is 0.903, reflecting a positive association with firm value; however, the relationship is statistically insignificant, as evidenced by a p-value of 0.371, which exceeds the 0.05 threshold. This suggests that although leverage exhibits a positive directional trend toward firm value, the effect lacks sufficient statistical strength to be deemed significant. Consequently, it can be concluded that leverage does not exert a meaningful influence on firm value.
Based on data on leverage (DER) and firm value (PBV) for technology companies listed on the Indonesia Stock Exchange for the 2021–2024 period, there appears to be no consistent relationship between leverage levels and firm value. For example, at Anabatic Technologies (ATIC), a very high DER of 35.00 in 2021 was accompanied by a similarly high PBV of 35.82. However, when the company's DER dropped significantly to 6.80 in 2024, its PBV also plummeted to just 1.43. At first glance, this seems to indicate a positive relationship between leverage and firm value in these companies.
However, a different situation is evident in a number of other companies. For example, M Cash Integrasi (MCAS), despite having a low DER of 0.29 to 0.72, managed to record a fairly high PBV, reaching 12.91 in 2022. Meanwhile, companies like Wira Global Solusi (WGSH) and Sentral Mitra Informatika (LUCK), which consistently have low DERs, also exhibited relatively low PBVs. This fact illustrates the lack of a consistent linear pattern between DER and PBV in the technology sector.
Within the framework of signaling theory, high leverage should be interpreted by the market as an indication of management confidence in future business prospects. However, in the technology industry, which relies heavily on
intangible assets, investors focus more on innovation and a company's ability to expand its market rather than simply examining its funding structure. This finding aligns with the research findings of Putri et al. (2023) and Novianti & Wijaya (2024) showed that investors in this sector tend to prioritize growth potential and innovation strategies over solely considering debt levels.
Practically, the results of this study imply that technology companies need to be more careful in managing leverage, as high leverage does not automatically increase a company's value in the eyes of investors. Companies should prioritize strategies that can increase growth and innovation, which the market places greater importance on when assessing the prospects of technology companies.
The regression analysis reveals that the liquidity coefficient is -0.043, accompanied by a significance value of 0.844, which substantially exceeds the
0.05 level. These results indicate that liquidity does not have a statistically significant impact on firm value. This implies that a firm's capacity to fulfill its short-term liabilities as measured by the Current Ratio (CR) does not necessarily influence investor perceptions regarding the firm's worth, as reflected in its Price to Book Value (PBV). Consequently, a high level of liquidity alone cannot be considered a reliable indicator of enhanced market valuation in the context of technology-sector firms.
Based on data on the liquidity ratio (CR) and firm value (PBV) of technology companies listed on the Indonesia Stock Exchange during the 2021– 2024 period, there is no consistent pattern between liquidity levels and firm value. For example, Elang Mahkota Teknologi (EMTK) has a relatively high liquidity ratio, ranging from 3.08 to 5.27 throughout the observation period. However, the company's value, as reflected in its PBV, fluctuated and tended to decline from 4.91 in 2021 to just 1.85 in 2024. This indicates that the company's strong ability to meet short-term obligations is not always accompanied by increased market appreciation.
A similar situation can be seen in Wira Global Solusi (WGSH), which recorded a very high CR, reaching 18.83 in 2023, but its PBV actually declined from 3.67 in 2021 to just 1.56 in 2024. Conversely, Multipolar Technology (MLPT), which has a relatively low CR, averaging around 1, managed to record a very high PBV in 2024, at 31.16. This fact suggests that low liquidity does not necessarily negatively impact a company's market value.
From a signaling theory perspective, a high liquidity ratio should ideally be interpreted by investors as a positive indication of a company's short-term financial health. However, in the technology industry, which relies heavily on intangible assets such as patents, software, and digital platforms, investors prioritize innovation and expansion prospects over liquidity strength. This finding aligns with previous research by Samsi & Indrabudiman (2024) and Astawinetu et al. (2023), which concluded that liquidity is not the primary determinant of company value in this sector.
Practically, the results of this study imply that technology company management cannot rely solely on improving liquidity ratios to increase company value in the eyes of investors. Therefore, companies need to optimize
their innovation, product development, and market expansion strategies to increase value, as these factors predominantly influence investor perceptions of technology companies.
The regression results indicate that the leverage variable has a coefficient of 0.742 with a significance level of 0.008, which is below the 0.05 threshold. This finding demonstrates that leverage exerts a positive and statistically significant influence on profitability. Specifically, an increase in the Debt to Equity Ratio (DER) tends to be associated with an improvement in Return on Assets (ROA). This suggests that technology firms utilizing debt strategically whether to scale operations or finance innovation are often able to enhance their profitability relative to their total asset base.
An analysis of leverage (DER) and profitability (ROA) data from technology sector firms listed on the Indonesia Stock Exchange between 2021 and 2024 reveals a consistent pattern that aligns with the study’s findings. Specifically, the data demonstrate that leverage, as indicated by DER, has a positive and statistically significant association with profitability, as reflected in ROA. For example, at Indointernet Tbk. (EDGE), the DER in 2021 was recorded as quite high at 5, followed by ROA of 6.7%. However, as EDGE's DER gradually decreased from 5.1 in 2022 to 1.8 in 2024, the company's ROA also decreased from 5.63% to 3.87%. This indicates a positive relationship between leverage levels and a company's ability to generate profits.This reinforces the indication that higher leverage contributes to a company's increased capacity to maximize assets to generate greater profits.
These results align with signaling theory, where increased leverage is often interpreted by investors and creditors as a positive signal of management optimism about the company's future. In the highly dynamic technology sector, which requires significant investment in research and development, leveraging leverage is a crucial strategy for accelerating innovation and expanding markets, ultimately boosting profitability. This research is also consistent with the results of studies by Safitri et al. (2025) and Amelia et al. (2025), which found that leverage has a positive effect on profitability.
From a practical perspective, these findings imply that technology company management can wisely utilize leverage as a strategic tool to drive profitability growth. However, companies still need to carefully manage their capital structure to avoid incurring excessive financial risk. Interest expenses arising from debt use must be offset by increased operating profit to maintain an optimal capital structure. Thus, leverage can be an important tool in increasing the profitability of technology companies, as long as it is used with careful risk assessment.
The findings reveal that the liquidity variable holds a coefficient of 0.408, suggesting a positive influence on profitability. With a significance level of 0.037, which falls below the conventional threshold of 0.05, the relationship is deemed statistically significant. Accordingly, the data analysis conducted in this study
confirms that liquidity exerts a favorable and meaningful impact on profitability among technology firms listed on the Indonesia Stock Exchange during the 2021– 2024 timeframe.
Analysis of data from firms in the technology sector reveals a consistent trend that reinforces the research conclusion: liquidity represented by the Current Ratio (CR) demonstrates a statistically significant and positive relationship with profitability, measured by Return on Assets (ROA). This trend is evident in companies such as Trimegah Karya Pratama Tbk (UVCR) and Zyrexindo Mandiri Buana Tbk (ZYRX). In 2021, both firms recorded high CR values of 4.97, which corresponded with elevated ROA levels of 7.68%. However, by 2023–2024, as their CRs declined to approximately 3.04–3.6, their ROA figures also dropped to between 3.81% and 4.35%. These patterns indicate that stronger short-term liquidity positions may enhance a company’s ability to generate profits.
The results of this study are consistent with signaling theory, which posits that a high level of liquidity serves as a favorable indicator to investors and the broader market, reflecting a company’s capability to fulfill short-term financial commitments and manage its working capital effectively. Such positive signals can enhance stakeholder trust, improve access to external financing, and support potential business expansion-factors that ultimately contribute to increased profitability. These findings are in line with the empirical evidence presented by Rahmanto et al. (2024) and Ceunfin et al. (2024), who similarly reported a significant and positive relationship between liquidity and profitability across various industry sectors. This further substantiates the argument that liquidity plays a vital role in sustaining a firm’s profit-generating capacity.
Practically, these findings imply that technology companies should continue to maintain optimal liquidity levels. Good working capital management not only helps companies meet short-term obligations but can also be used to finance strategic needs that support increased profitability. Companies also need to ensure that excess liquidity is not solely held in cash or cash equivalents but is allocated to profitable short-term investments that continue to generate returns for the company.
The analysis reveals that the profitability variable has a coefficient of 0.604, signifying a positive relationship with firm value. This relationship is statistically significant, as evidenced by a p-value of less than 0.001, which falls well below the 0.05 threshold. These findings suggest that profitability exerts a favorable and significant influence on firm value among technology sector companies listed on the Indonesia Stock Exchange during the 2021–2024 period. In practical terms, an increase in a firm’s profitability measured by Return on Assets (ROA) tends to enhance its market valuation, as reflected in the Price to Book Value (PBV) ratio. An analysis of financial data from Indonesian technology firms during the
2021–2024 period reveals a consistent trend supporting the assertion that profitability represented by Return on Assets (ROA) positively and significantly influences firm value, as indicated by the Price to Book Value (PBV) metric. For instance, Indointernet Tbk. (EDGE) experienced a decline in ROA from 6.7% in
2021 to 3.87% in 2024, accompanied by a notable drop in PBV from 5.82 to 1.43. Comparable trends were observed in Zyrexindo Mandiri Buana Tbk. (ZYRX) and Trimegah Karya Pratama Tbk. (UVCR), where both firms saw ROA decrease from approximately 7.68% in 2021 to 3.81% in 2024, coinciding with a contraction in PBV from around 6.95 to 3.0. These patterns imply that diminished profitability is often followed by a reduction in market valuation, indicating that a firm’s ability to generate earnings is closely tied to investor assessments of its intrinsic value.
Viewed through the lens of signaling theory, the data provide consistent evidence that robust profitability serves as a favorable signal to the market, reflecting optimistic expectations about a firm’s future performance. Companies exhibiting high Return on Assets (ROA) are generally perceived by investors as having strong asset management capabilities and a lower likelihood of financial distress, which enhances their investment appeal. This heightened interest typically leads to increased demand for shares, resulting in higher stock prices and, consequently, a rise in the Price to Book Value (PBV).
Furthermore, these findings align with prior studies, such as those conducted by Komalasari & Yulazri (2023) as well as Adhyasta & Sudarsi (2023), which also concluded that profitability exerts a positive and statistically significant influence on firm value. This consistency across research underscores the importance of profitability as a key determinant of firm valuation, particularly within the technology sector and more broadly across various industries.
Practically, these research findings provide implications for technology company management to continuously improve their profitability performance, whether through operational efficiency, product innovation, or market expansion. This is crucial not only for maintaining business sustainability but also for increasing the company's value in the eyes of investors and the capital market.
The z-test results yielded a z-value of 2.477 > 1.96 with a significance level of 5%. The Sobel test yielded a p-value of 0.024 < 0.05. Therefore, this study demonstrates that leverage has a positive and significant effect on firm value through profitability in technology companies listed on the Indonesia Stock Exchange for the 2021–2024 period.
Based on data from technology companies in Indonesia for the 2021–2024 period, a pattern supports the study's findings: leverage, measured using the Debt to Equity Ratio (DER), has an indirect effect on firm value (PBV) through increased profitability (ROA). For example, at Indointernet Tbk. (EDGE), leverage was quite high in 2021, at 5%, followed by an ROA of 6.7% and a PBV of 5.82. However, when the DER dropped significantly to just 1.8 in 2024, ROA also weakened to 3.87%, and PBV plummeted to 1.43. This illustrates that a drastic reduction in leverage can reduce a company's profit-generating drive, which in turn leads to a decline in market confidence in the company's value.
This finding aligns with signaling theory, which states that a company's decision to take on debt can be interpreted as a signal of management optimism regarding future cash flow prospects. Companies with manageable leverage demonstrate confidence in their ability to generate profits to meet their debt obligations. When this leverage strategy successfully increases profitability, this is a positive indicator for investors, ultimately driving increased company value through higher PBV.
The findings of this study are consistent with prior research conducted by Safitri et al. (2025) and Amelia et al. (2025), both of which observed that leverage can influence firm value indirectly through its impact on profitability. Within the technology sector—characterized by high capital requirements for innovation, research, and expansion activities—leverage serves as a vital financial instrument that facilitates profitability enhancement. This improvement in profitability, in turn, contributes to more favorable investor assessments of a firm’s financial performance and future outlook, which is ultimately reflected in a rise in its market valuation.
Practically, these findings imply that technology company management needs to utilize debt financing wisely to fund productive projects that can increase profitability. However, companies must also manage leverage risk effectively to prevent excessive interest and liability burdens that could reduce future financial performance.
The z-test yielded a z-value of 1.892 < 1.96 with a significance level of 5%. The Sobel test yielded a p-value of 0.067 > 0.05. Therefore, this study indicates that liquidity does not significantly influence firm value through profitability in technology companies listed on the Indonesia Stock Exchange during the 2021– 2024 period.
Based on data from technology companies in Indonesia during the 2021– 2024 period, the relationship between liquidity (CR) and profitability (ROA), which in turn affects firm value (PBV), does not show a consistent pattern. For example, Sentral Mitra Informatika Tbk (LUCK), where its CR has remained relatively stable at around 3.5 to 4.2 throughout the period. However, the company's ROA is very low, fluctuating between 0.09% and 3.50%, while its PBV has continued to decline from 1.97 in 2021 to just 0.37 in 2024. This phenomenon further clarifies that high liquidity does not directly translate into increased profitability that could drive a company's market value.
The findings of this study diverge from the conventional assertions of signaling theory, which posits that elevated liquidity levels function as favorable indicators to investors regarding a firm's capacity to fulfill short-term obligations and sustain operational stability. Under this theoretical framework, a robust liquidity ratio is expected to bolster investor confidence and positively influence firm value. However, in the context of the technology sector, such signals appear insufficient to significantly impact firm value through the pathway of enhanced profitability.
These results align with prior studies, including those by Ceunfin et al. (2024) and Anggraini & Hwihanus (2025), which concluded that liquidity does
not exert a mediating effect on firm value via profitability, particularly in sectors driven by innovation. This suggests that investors in technology industries are more inclined to assess company value based on metrics that are more strongly linked to long-term growth potential rather than short-term liquidity indicators.
Practically, these findings imply that technology companies cannot rely solely on high liquidity levels to increase profitability, leading to increased company value. Companies need to maximize available funds for investment in productive assets and innovation to increase profitability and create added value for shareholders. Working capital management remains important, but must be balanced to avoid hindering the potential for higher returns from the company's core investments.