THE EFFECT OF INFLATION, COMPANY SIZE, CAPITAL STRUCTURE, AND FINANCIAL PERFORMANCE ON COMPANY VALUE IN THE PLASTICS AND PACKAGING SUB-SECTOR ON THE INDONESIA STOCK EXCHANGE

Abstract

The phenomenon underlying this research is the fluctuation in company value, particularly during the COVID-19 pandemic, which caused a sharp decline in the Jakarta Composite Index (JCI), including in the manufacturing sector. Despite economic recovery, the plastics and packaging sub-sector experienced instability in company value, suspected to be influenced by external pressures such as inflation, as well as internal factors such as capital structure and financial performance. This study aims to analyze the influence of inflation, company size, capital structure, and financial performance on company value in the plastics and packaging sub-sector of manufacturing companies listed on the Indonesia Stock Exchange (IDX) for the 2017–2023 period.

        Company value is measured using the Tobin's Q ratio, inflation is measured using the consumer price index, company size is measured using the natural logarithm of total assets, capital structure is measured using the Debt-to-Equity Ratio (DER), and financial performance is measured using the Current Ratio (CR). This study uses a quantitative approach with secondary data obtained from annual financial reports. The analysis technique used was multiple linear regression with SPSS 26.

        The results of the study indicate that (1) inflation has a negative effect on firm value, (2) firm size has a negative effect on firm value, (3) capital structure has no effect on firm value, and (4) financial performance has a negative effect on firm value. These findings are expected to be used as considerations by investors and companies in strategic decision-making.