The Moderating Effect of Firm Size on the Relationship Between Capital Structure and Profitability Toward Firm Value

This study aims to analyze the effect of capital structure and profitability on firm value, as well as the moderating role of firm size in non-cyclical consumer sector companies listed on the Indonesia Stock Exchange for the period 2020–2023. This sector was chosen due to its defensive nature and ability to withstand economic crises, accompanied by significant growth in the number of issuers during the study period. The study employs signaling theory and trade-off theory as the theoretical framework to examine how companies communicate to investors through capital structure, profitability, and firm size in an effort to enhance firm value. Firm value is measured using Price to Book Value (PBV); capital structure is measured by the ratio of Total Debt to Total Assets (TD/TA); profitability is proxied by Return on Assets (ROA); and firm size is calculated using the logarithm of total assets. The research findings are expected to provide both theoretical insights and practical implications for corporate management and investors to make strategic decisions aimed at increasing firm value amid dynamic economic conditions and inflationary pressures.