By sending signals that represent the company's financial situation, businesses can lessen the information gap among both internal and external stakeholders, particularly investors, according to Spence's (1973) signal theory. These signals may appear as capital structures, dividend policies, financial statements, or metrics like liquidity and profitability (Kasmir, 2021). High profitability indicates that the business is doing well to generate profits sustainably (Brigham & Daves, 2021), while high liquidity indicates financial stability and the capacity to fulfill immediate obligations, thereby reducing the risk of bankruptcy (Weston & Brigham, 2014). Capital structure is positioned as a strategic response of management that becomes the medium of signal transmission to the market, where the optimal composition between debt and equity reflects prudent financing policies (Brigham & Houston, 2019). According to Connelly et al. (2011), in order for a signal to be trusted by investors, it must meet three criteria, namely observable, contain real information, and be difficult to falsify. Therefore, profitability and liquidity act as initial signals, while capital structure reinforces those signals, which, when received positively by the market, will increase investors' view of the company's worth.

Andhika and Yuniningsih (2022) assert that a company's profitability serves as a criterion for displaying its earnings. The ability of a business to turn a profit over a specific time period is measured by profitability. Because it analyzes assets to assess a company's capacity to make profits after tax deductions, this study use the ROA (Return on Asset) ratio. Through the ROA ratio level, the business must protect its financial performance from risks that could result in losses (Maulydia & Setiawati, 2024).Kasmir (2021) states the ROA formula as follows:

𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡

𝐴𝑠𝑠𝑒𝑡𝑠 𝑋 100%

The ability of the business to use its assets as efficiently as possible to turn a profit is indicated by a high ROA.

A company's ability to use its present assets to meet short-term obligations is reflected in its liquidity. The current ratio, which illustrates how much current assets can cover current debt, is used in this study to quantify liquidity. Kasmir (2021) states that the formula for the current ratio is:

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑅𝑎𝑡𝑖𝑜 =

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐷𝑒𝑏𝑡

Strong liquidity conditions are shown in a high current ratio, which shows that the corporation can satisfy short-term obligations.

The ratio of debt to equity that a business utilizes to fund its operations is reflected in its capital structure. The Debt to Equity Ratio (DER) is used in this study to measure capital structure, which serves as a mediating variable. Kasmir (2021) states that the DER formula is:

A company's value reflects the market's perception of the company's prospects and performance, which is reflected through the stock price. In this study, The Price to Book Value (PBV) ratio is used to determine a company's worth. According to Kasmir (2021), the PBV formula is:

96 businesses in the food and beverage industry that are listed on the Indonesia Stock Exchange (IDX) make up the study's population. The selection of this sector is based on its characteristics as part of basic needs (consumer non- cyclicals) that are relatively resistant to economic turmoil. However, in the 2020– 2023 period, the sector experienced a decline in the Price to Book Value (PBV) ratio, demonstrating a decline in the market's assessment of the company's worth despite the continued high level of demand. The availability of comprehensive financial statement data and the significance of the PBV decline phenomenon

during that time period were taken into consideration while choosing the observation period.

Applying the purposive sampling methodology involves selecting samples by evaluating them according to predetermined standards.

The technique to collect data in this study uses data from literature and documentary study methods. Literature studies are carried out by examining scientific literature, journals, articles, and other written sources that are relevant to the research problem. The documentary technique is carried out by utilizing written documents such as financial statements, annual reports, and other official documents from The business that is the subject of the study. The document is usually public and can be accessed for systematic analysis to obtain valid secondary data. The website of the Indonesia Stock Exchange (IDX) and the financial statements of the company were used to gather data for this study.

Descriptive Statistical Test

Measures such as minimum, maximum, average, variance, and standard deviation are examples of descriptive statistics that are used to characterize the features of data in a study. These metrics are used to find patterns, consistency, and data distribution.

Classical Assumption Test

The following classical assumption tests were employed in this study:

This test aims to ensure that the residue of the regression model is normally distributed, so that the results of the analysis are valid and reliable. The residual normality test in this study used the Kolmogorov- Smirnov (K-S) test. The decision-making criteria are at a significance level of 5%.

In this study, hypothesis testing the influence that profitability and liquidity have an impact on the company's value through capital structure was carried out using path analysis based on multiple regression techniques. Pathway analysis allows researchers to identify causal relationships in more depth, including indirect influences through modal structures as intervening variables. Thus, the use of multiple regression in path analysis is considered appropriate because it is able to provide comprehensive results in answering problem formulations and testing hypotheses empirically and systematically.

Coefficient of determination (R²): used to measure the proportion of variation in dependent variables that can be explained by independent variables in the model. To determine if the independent variables collectively have an impact on the dependent variables, the Stimulant F test is utilized to evaluate the overall significance of the regression model. The significance of each independent variable's partial influence on the dependent variable is tested using the Parisal test (t).

Multiple linear regression is developed into path analysis, which is used to evaluate the causal links between variables in a theoretically designed structural model. The purpose of this approach is to evaluate the degree to which the mediation variable bridges the influence between independent and dependent variables, or to examine the impact of mediation. The Sobel Test is employed as a significance testing tool to statistically examine the impact of mediation.

According to the findings of a data tabulation of 31 firms in the food and beverage industry that were listed between 2020 and 2023 on the Indonesia Stock Exchange, data were obtained for each of the following research variables:

Table 2. Descriptive Statistical Analysis

Normality Test

The Kolmogorov-Smirnov method's normality test produced a significance value of 0.200 (> 0.05), indicating a residual that is normally distributed. The presumption of normalcy is thus satisfied.

Multicollinearity Test

According to the results of the multicollinearity test, all independent variables had a VIF < 10 and a tolerance value > 0.1, indicating that the model does not contain multicollinearity.

Table 3. Multicollinearity Test Results Coefficients

Heteroscedasticity Test

Determination Coefficient (R²)

Tabel 6. Model Summary I

A determination coefficient (R²) of 0.246 indicates that 24.6% of the variation in Capital Structure can be explained by Liquidity and Profitability, while the remaining 75.4% is explained by other factors outside the model. This value reflects the predictive ability of the model in the medium category.

Simultaneous Test Results (F Test)

Table 7. ANOVA I Test Results

With a significance level of 0.001, the F test produced a computed F-value of 19.743, which was less than 0.05. This indicates that the Capital Structure is significantly impacted by both liquidity and profitability at the same time. The regression model that was formed has statistical feasibility.

Partial Test Results (t-test)

Table 8. Regression Coefficient I Test Results

Capital Structure was significantly impacted negatively by liquidity (t = - 6.075; sig. = 0.001) and profitability (t = -2.891; sig. = 0.005), according to the t- test. The two independent variables partially have an influence on the dependent variable.

The multiple linear regression equations obtained are:

Capital Structure = 0.016 - 0.019(Liquidity) - 0.008(Profitability)

Thus, for every unit increase in liquidity, the capital structure will fall by 0.019, and for every unit rise in profitability, the capital structure will fall by

0.008. Both variables contributed to the decline in the company's debt structure.

Tabel 9. Model Summary II

With a determination coefficient value (R2) of 0.382, liquidity, profitability, and capital structure account for 38.2% of the variation in company value. The model's Adjusted R2 of 0.366 suggests that it is suitable for use in generalizations.

Simultaneous Test Results (F Test)

Table 10. ANOVA II Test Results

The F test gives an F result of a calculation of 24.682, significance level of 0.000, indicating simultaneous significance of the model. Together, the three distinct factors have an impact on the company's value.

Partial Test Results (t-test)

Table 11. Regression Coefficient II Test Results

A significant positive impact of liquidity (t = 3.191; sig. = 0.002), a significant negative impact of capital structure (t = -4.956; sig. < 0.001), and a significant positive impact of profitability (t = 2.877; sig. = 0.005) also contribute to the company value.

Company Value = 0.189 + 0.006(Liquidity) + 0.004(Profitability) - 0.226(Capital Structure)

This indicates that for every unit increase in liquidity, the company value will rise by 0.006, for every unit increase in profitability, the company value will rise by 0.004, and for every unit increase in capital structure, the company value will fall by 0.226. This model confirms that companies that are financially healthy and less reliant on debt tend to have better market value.

Liquidity to Company Value through Capital Structure

The study's findings demonstrate that profitability significantly and favorably affects a company's worth. This demonstrates that a company's perceived value among investors increases with its capacity to turn a profit. The primary metric that represents operational effectiveness and potential for future expansion is profitability. Businesses that can consistently turn a profit are seen by investors as reliable, effective, and desirable places to invest. This finding is in line with Spence's (1973) signal theory, which holds that a company's prospects are positively signaled to the market by high earnings. Additionally, these findings are consistent with earlier studies conducted by Ranti & Pertiwi (2020), Dewi & Praptoyo (2022), and Syaharani & Nur (2022) which showed a positive relationship between profitability and company value. Practically, company management is advised to continue to improve cost efficiency and optimize asset utilization in order to increase profits which ultimately have an impact on increasing the company's value.

In addition to profitability, regression analysis results also demonstrate that liquidity significantly and favorably affects the company's worth. This demonstrates that investors view businesses that can successfully fulfill their short-term commitments as more reliable and financially sound.High levels of liquidity reduce the risk of operational failure and create a positive perception in

the market. The food and beverage sector, which relies heavily on smooth cash flow for daily operations, is particularly sensitive to this aspect. These findings corroborate the view of signal theory, which states that internal financial conditions such as liquidity can provide investors with important information. Brigham & Houston (2022) assert that healthy liquidity reflects the efficiency of cash management and short-term liabilities. This research is also consistent with the findings of Jannata & Pertiwi (2022) and Agustin & Anwar (2022), which discovered that liquidity had a liquidity impact on company value. Managerially, this suggests the importance of careful cash and current asset management to maintain market confidence.

The study also discovered that the relationship between profitability and firm value is strongly mediated by capital structure. The outcomes of the Sobel Test's mediation test demonstrate that profitability affects the capital structure both directly and indirectly. Profitable businesses typically employ their own capital instead of borrowing from outside sources. This condition results in lower leverage, creating a healthier and more stable capital structure, which ultimately improves investors' perception of the company. These findings support the signal theory as well as the research results of Jemani & Erawati (2020), which highlight the role of capital structure as a mechanism that reinforces the influence of profitability on firm value. The strategic implication of these findings is that management needs to align capital structure policies with profit-making capabilities. When profitability increases, companies should reduce their dependence on debt in order to maximize the firm’s value optimally.

It has also been demonstrated that capital structure mediates the impact of liquidity on a firm's worth. Businesses with a lot of liquidity are usually better able to satisfy their own funding needs, which means they don't need as much debt. This improves the capital structure and lowers financial risk, which further increases the value of the company. These findings are also in line with signal theory, which holds that businesses with high liquidity send out a good signal about how well they manage working capital and cash flow. This study backs up the conclusions of Puri & Lisiantara (2023), who found that capital structure acts as a mediating variable between liquidity and a company's value. The managerial implication is the importance of maintaining optimal liquidity levels. Liquidity that is too low increases the risk of default, while liquidity that is too high can reflect inefficiency. Therefore, the management of cash, receivables, and inventories must be carefully managed so that the capital structure remains healthy and the firm’s value is maintained.

However, This research has limitations. Only businesses in the food and beverage industry that are listed on the Indonesia Stock Exchange are the subject of the study, so the results cannot necessarily be generalized to other sectors with different financial characteristics. In addition, the independent variables used are

limited to profitability and liquidity, whereas a number of additional factors can also affect the company's worth, including company size, ownership structure, revenue growth, dividend policy, and macroeconomic conditions. These limitations become opportunities for further research that can extend the model by considering other variables or different industry sectors.