Determinants Of Stock Prices And Their Implications For Company Value Moderated By Company Size

(Empirical Study on Food and Beverage Companies Listed on the Indonesia Stock Exchange)

Abstract

This study investigates the determinants of stock prices and their implications for firm value, with firm size as a moderating variable. The research focuses on food and beverage sub-sector companies listed on the Indonesia Stock Exchange (IDX) during the 2019–2024 period. The independent variables examined include liquidity ratios (Current Ratio and Quick Ratio), leverage ratios (Debt to Asset Ratio and Debt to Equity Ratio), profitability ratios (Return on Assets, Return on Equity, and Net Profit Margin), and macroeconomic variables (inflation and economic growth). Stock price serves as an intervening variable, while firm value is measured using Price to Book Value (PBV). Using a quantitative approach with panel data regression analysis on 9 companies selected through purposive sampling, the research employs three estimation models: Common Effect, Fixed Effect, and Random Effect, with model selection determined through Chow, Hausman, and Lagrange Multiplier tests. The findings reveal that liquidity, leverage, profitability, and inflation significantly influence stock prices both partially and simultaneously. However, economic growth shows no significant effect on stock prices. Stock prices demonstrate a positive and significant influence on firm value, while firm size strengthens (moderates) the relationship between stock prices and firm value. The model exhibits strong explanatory power with an R-squared value of 87.47% for the moderating model. These findings support signaling theory and behavioral finance perspectives, confirming that fundamental financial information and macroeconomic conditions serve as crucial signals in stock price formation and firm value enhancement. The study contributes theoretically by developing an integrative model of firm value creation and practically by providing insights for corporate management, investors, and policymakers in emerging capital markets.