The long-term objective of every company is to maximize its firm value, as higher firm value translates into greater benefits for shareholders. A rising share price is generally perceived as a signal of improved firm value, which reflects not only the company’s future outlook but also its current asset performance. According to Andriyanti (2023), companies typically pursue short-term goals like profit maximization and long-term objectives such as enhancing shareholder prosperity. Attaining a high firm value is key to fulfilling both, as it integrates aspects of financial results, stakeholder trust, and corporate image. Hamsyah Mukti & Suhendra Winarso (2020) state that one effective strategy to increase firm value is through raising stock prices. An increase in share price often signals sound corporate performance, solid growth prospects, and heightened investor confidence. Consequently, when share prices go up, shareholder wealth is expected to increase accordingly.

In the stock market, price fluctuations are common and noteworthy. The mining sector, in particular, plays a crucial role in Indonesia's economic development—contributing around 10–15% of the nation’s GDP and employing approximately 1.7 million people ( www.esdm.go.id ). Despite its importance, this sector frequently grapples with numerous challenges, such as unstable global commodity prices, tightening environmental policies, and societal pressure for ethical business conduct. According to data from the Jakarta Composite Index (JCI) in 2023, companies within the mining and energy industries in Indonesia experienced a difficult year. For instance, PT Timah Tbk (TINS) suffered a loss of IDR 487 billion, while PT Bukit Asam Tbk (PTBA) posted a net profit of IDR 6.3 trillion, which marks a 51.7% decline from the previous IDR 12.78 trillion. Similarly, PT Aneka Tambang Tbk (ANTM) experienced a 19.45% drop in net profit, decreasing from IDR 3.82 trillion to IDR 3.77 trillion. These downturns are largely attributed to the weakening of export markets, which directly affected company performance.

Given such conditions, it is clear that firm value is influenced by numerous internal factors one of the most significant being profitability. Companies with strong profits tend to have better growth prospects, a key factor for investors when making funding decisions.

Apart from profitability, leverage is another critical financial metric that investors consider. Leverage reflects the extent to which a company relies on debt to finance its operations. High leverage levels may increase risk, especially during financial downturns, while lower leverage indicates more conservative and stable financial management. As explained by Mipo (2022), leverage is typically measured using the Debt-to-Equity Ratio (DER), which helps assess how well a company manages its liabilities in relation to its equity.

Another important factor increasingly emphasized in modern business is Corporate Social Responsibility (CSR) Machmuddah et al. (2024), CSR is no longer a voluntary act but a necessity for companies operating in today's ethical and environmentally conscious business climate. CSR refers to a company’s efforts to ensure its activities contribute positively to the social and environmental context in which it operates Adrai et al. (2024) highlight that CSR is a reflection of a firm’s commitment to responsible practices that benefit not only its shareholders but also broader stakeholders such as communities and the environment. Companies with high profitability have more capacity to carry out CSR programs, which may boost stakeholder trust and, in turn, enhance firm value.

In Indonesia, the implementation of CSR is regulated by law. Law No. 40 of 2007 on Limited Liability Companies and Law No. 25 of 2007 on Investment require businesses to incorporate CSR into their operations. Furthermore, Government Regulation No. 47/2012 mandates that every company must take responsibility for the social and environmental impacts of its business. This is reinforced in Articles 2 and 3, which explicitly state that CSR obligations apply to all legally incorporated companies.

The importance of CSR as a moderating factor between financial performance and firm value has been emphasized in multiple studies. For instance, research by Aprilliyani et al. (2023) titled "Analysis of Size and Profitability on Firm Value with Corporate Social Responsibility as Moderation," showed that profitability (ROA) positively and significantly affects firm value. However, firm size was found to have a negative and insignificant impact. Their findings also revealed that CSR strengthens the link between profitability and firm value but does not significantly moderate the effect of firm size.

Building on these findings, this study seeks to explore whether CSR practices in mining companies can influence investor decisions and thus support sustained investment. The development of this research lies in the specific variables and subjects chosen, with a focus on the mining sub-sector of the energy industry. It aims to provide empirical insight into how CSR influences the relationship between profitability, leverage, and firm value.

In line with the problems identified, this study focuses on analyzing how financial performance, specifically profitability and leverage, affects firm value, with CSR acting as a moderating variable. Firm value in this study is measured using the Price to Book Value (PBV) indicator. Therefore, this research is titled: "The Effect of Profitability and Leverage on Firm Value with Corporate Social Responsibility (CSR) as a Moderating Variable."

The purpose of this study is to assess the current state of profitability, leverage, firm value, and CSR among mining companies in the energy sector listed on the IDX from 2020 to 2024. In addition to examining the direct effects of profitability and leverage on firm value, this study also seeks to determine whether CSR moderates these relationships.

This study focuses on mining companies that are part of the energy sector and are listed on the Indonesia Stock Exchange (IDX) between the years 2020 and 2024. The financial data used in this research were obtained directly from the official IDX website at ( www.idx.co.id ). The study utilizes a quantitative method, emphasizing the use of numerical data to identify and analyze the causal relationships between variables. This approach is adopted to examine how independent variables affect the dependent variable through statistical testing.

The technique used to determine the research sample is purposive sampling, which involves selecting samples based on predetermined and relevant criteria. The criteria for selecting companies are as follows: (a) The company must be listed on the Indonesia Stock Exchange (IDX); (b) It must belong to the energy sector and be classified under the mining sub-sector; (c) The company must have published financial reports for each year from 2020 to 2024; (d) The company must not have recorded any losses during the 2020– 2024 period; (f) The company must provide disclosure of Corporate Social Responsibility (CSR) activities.

In conducting panel data regression, there are three primary model approaches commonly used: the Pooled Least Square (PLS), Fixed Effect Model (FEM), and Random Effect Model (REM). The first step involved the Chow Test, which evaluates whether the FEM is more appropriate than the PLS model. The result of the Chow Test showed a cross-section F significance value of 0.0000, which is lower than the 0.05 significance level. This indicates that the Fixed Effect Model (FEM) provides a better fit compared to the PLS model. Subsequently, the Hausman Test was applied to determine whether FEM or REM is more suitable. The test result revealed a p-value of 0.0000, which is less than 0.05. Thus, the conclusion is that the Fixed Effect Model (FEM) is statistically more appropriate and was selected for further analysis. Moreover, prior to applying the regression model, classical assumption testing was carried out. The results confirmed that the dataset satisfies the normality assumption, exhibits no multicollinearity, and shows no heteroscedasticity, indicating that the model is appropriate for regression analysis.

This research examines the influence of profitability and leverage on firm value, while also evaluating the moderating role played by corporate social responsibility (CSR). The analysis produces several notable findings:

The results indicate that profitability, represented by Return on Assets (ROA), does not exert a statistically significant effect on firm value. This suggests that, within the examined sample, enhanced profitability on its own does not necessarily result in increased value for the firm in the perception of stakeholders or the market.

Conversely, leverage demonstrates a meaningful and positive impact on firm value. Firms with higher debt levels appear to be regarded more favourably by investors, potentially due to the belief that management is strategically employing financial leverage to support business expansion and operational effectiveness.

The analysis also shows that CSR moderates the relationship between profitability and firm value. Firms that exhibit both strong financial performance and active engagement in CSR initiatives send a robust signal to the market. This alignment of economic success with social responsibility may foster greater investor trust and positively influence overall firm value.

However, CSR does not significantly moderate the relationship between leverage and firm value. One interpretation is that CSR, being a non-financial factor, may not be perceived as directly relevant to a firm’s capital structure or risk-related decisions. Consequently, leverage remains the dominant influence in this dynamic.

CSR engagement reflects a firm’s broader recognition of its societal and environmental obligations. While sound financial performance reassures stakeholders of a company’s capacity to generate returns and remain sustainable, transparent CSR practices may reinforce corporate reputation and contribute to long-term value creation. Nevertheless, the strength of CSR’s moderating influence appears to depend on whether profitability or leverage is the principal driver of firm value.

The present study concludes that profitability, as represented by Return on Assets (ROA), does not exert a statistically significant impact on firm value. Furthermore, the findings demonstrate that corporate social responsibility (CSR) does not function as a moderating factor in the relationship between leverage and firm value. In light of these results, it is recommended that future research consider incorporating additional variables—such as company size, sales growth, or liquidity that may exhibit a more pronounced effect on firm value.

To gain more in-depth and refined insights, future studies are encouraged to utilise more robust CSR evaluation frameworks, such as the Global Reporting Initiative (GRI) standards or the Environmental, Social, and Governance (ESG) index. These instruments would facilitate a more precise assessment of the moderating influence of CSR within the relationship between financial indicators and firm value.

Additionally, it is advisable for future investigations to cover a longer observation period and encompass a larger, more diverse sample of firms. Broadening the research scope in this manner would enhance the reliability and generalisability of the findings across various economic environments.