International Journal of Engineering Business

and Social Science

Vol. 1 No. 06, July-Augusts 2023, pages: 511-523

e-ISSN: 2980-4108, p-ISSN: 2980-4272

https://ijebss.ph/index.php/ijebss

511

The Influence of Profitability, Capital Structure, Investment

Decisions, and Dividends on Firm Value with Leverage as an

Intervening Variable in Manufacturing Sector Companies, Sub-

sector Good Consumer, Listed in the Indonesian Stock

Exchange (ISE)

Mesra Berlyn Hakim

, Hwihanus

ITB Ahmad Dahlan Lamongan

Universitas 17 Agustus 1945 Surabaya

Email: berlyn[email protected], hwihanus@untag-sby.ac.id

Keywords

Abstract

Profitability, Capital

Structure, Investation

Decision, Dividend,

Leverage, Firm Value.

This study aims to determine and analyze the influence of profitability, capital

structure and investment decisions, and dividends on leverage and company

value in Good Consumer Sub-sector Manufacturing Sector companies listed on

the Indonesia Stock Exchange in 2019-2021. The population of this study is all

Good Consumer Sub-sector Manufacturing companies listed on the ISE in

2019-2021 with a total of 60 companies. The sampling technique is purposive

sampling with criteria for the availability of company financial statements until

2021 and positive profitability, obtained from a sample of 60 companies. Data

analysis techniques use statistical descriptions and path analysis. The results

showed that of the 13 hypotheses, there were four influential hypotheses and

nine hypotheses that had no effect.

for possible open-access publication

under the terms and conditions of the Creative Commons Attribution (CC BY

SA) license (https://creativecommons.org/licenses/by-sa/4.0/).

1. Introduction

The purpose of establishing a company according to The theory of the firm is to maximize the wealth

or value of the firm. The survival of a company can be realized by improving performance. The good

performance of a company will also have an impact on the value of the company to be good. Defines company

value as a measure of the success of management performance. In addition, there is also the role of investors

in perceiving the value of the company, namely by relating it to the stock price. (Brigham & Houston, (2021)

Shareholders are company owners who employ agents/boards of directors, therefore agents/board of

directors of companies are required to manage the company in accordance with the interests of the owners in

order to be able to increase the value of the company as reflected in the stock price. In order to achieve these

goals, increasing stock prices, behind owners or agents, must be able to combine their perceptions well, lest

problems arise (agency problems) that result in not achieving company goals or commonly known as the theory

of agency (Jensen in Meckling, 1976).

Given the importance of company value for all parties, this study aims to determine the effect of

profitability, capital structure, investment decisions, and dividends on leverage and company value in good

consumer sub-sector manufacturing sector companies listed on the ISE in 2019-2021

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LITERATURE REVIEW

Signal Theory

Signaling theory was first proposed by Spence (1973), that the sending party (owner of information)

provides a signal or signal in the form of information that reflects the condition of a company that is beneficial

to the recipient (investor).

Agency Theory

According to (Suseno, 2012) agency theory explains the relationship between management and

shareholders, where management has greater information than shareholders, so it often causes agency

problems. Agency problems occur between shareholders and management and between management and debt

owners (Brigham & Houston, 2021b) When agency problems occur, agency costs will arise. Agency costs are

costs incurred due to the use of company debt. When a company experiences agency problems, it means that

the use of corporate debt harms creditors, because it is possible.

Pecking Order Theory

The theory of pecking order (Corey and Myers, 1984) states that companies in carrying out their

investment activities will fund it first using internal funds, after that when it is still lacking, it will use external

funding starting with safe debt rather than risky debt and the last is common stock. In other words, this theory

actually concerns the hierarchy of sources of funds starting with internal sources of funds first.

Profitability

Company profitability is the company's ability to earn profits in relation to sales, total assets, and own

capital (Sartono, 2001 and Setyowati and Nursiam, 2014).

Capital Structure

Capital structure is a description of the form of the company's financial proportion, namely between

the capital owned which comes from long-term liabilities and own capital (stakeholders equity) which is the

source of financing for a company (Falhmi, 2018: 27).

Investment Decisions

Investment decisions are decisions that involve the allocation of funds from within and funds from

outside the company there are shared forms of investment. Investment decisions can be grouped into short-

term investments such as investments into cash, short-term securities, receivables, and inventories as well as

long-term investments in the form of land, buildings, vehicles, machinery, production equipment, and other

fixed assets. Investment is a commitment to a number of funds or other resources in the future (Wicaksono &

Tandelilin, 2011).

Dividend

The definition of dividends according to Nikiforos K. Laopodis is a cash payment paid by the

company to shareholders (Laopodis, 2020).

Leverage

The level of financing debt of a company can be measured by using Leverage. The use of debt to the

company will be at risk of interest costs that must be paid by the company. The greater the value of the

company's leverage, the higher the debt interest costs that must be paid by the company, as a result the

company's value is reduced (Lestari et al., 2020).

Company Value

Corporate value can also be defined as the goal of maximizing shareholder prosperity that can be

achieved by maximizing present value. If the price of shares owned increases, all shareholder profits will

increase (Sartono, 2010: 9).

Variables and Indicators

The variables and indicators used in this study are as follows.

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Table 1. Research Variables, Notations and Indicators

Source: Data processed, 2023.

Figure 1. Conceptual Framework

Research Hypothesis

The research hypothesis can be carried out as follows.

1. Profitability has a significant effect on Leverage in Manufacturing Sector Companies in the good

consumer sub-sector?

2. Capital Structure Has a Significant Effect on Leverage in Manufacturing Sector Companies in the

Good Consumer Sub-Sector?

3. Investment Decisions Have a Significant Effect on Leverage in Manufacturing Sector Companies in

the Good Consumer Sub-Sector?

4. Dividends have a significant effect on Leverage in Manufacturing Sector Companies in the good

consumer sub-sector?

5. Leverage has a significant effect on company value in manufacturing sector companies in the good

consumer sub-sector?

6. Profitability has a significant effect on Company Value in Manufacturing Sector Companies in the

good consumer sub-sector?

7. Capital Structure Has a Significant Effect on Company Value in Manufacturing Sector Companies in

the Good Consumer Sub-Sector?

8. Investment Decisions Have a Significant Effect on Company Value in Manufacturing Sector

Companies in the Good Consumer Sub-Sector?

Variable

Notation

Indicator

Free Variable

Profitability (X

)

1-1

Return On Asset

1-2

Return On Equity

1-3

Net Profit Margin

Structure Modal (X

)

2-1

Long Term Debt to Asset

2-2

Short Term Debt to Asset

Investment Decisions (X

)

3-1

Market to Book Assets Ratio

3-2

Price Earning Ratio

Dividend (X

)

4-1

Dividend Payout Ratio

4-2

Dividend Yield Ratio

Variable Intervening

Leverage (Z)

1-1

Debt to Equity Ratio

1-2

TIE

Bound Variables

Company Value (Y)

1-1

Ratio Q

1-2

Price Book Value

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9. Dividends have a significant effect on Company Value in Manufacturing Sector Companies in the

good consumer sub-sector?

10. Leverage mediates the effect of profitability on company value in manufacturing sector companies in

the good consumer sub-sector?

11. Leverage mediates the effect of Capital Structure on Company Value in Manufacturing Sector

Companies in the good consumer sub-sector?

12. Leverage mediates the effect of investment decisions on company value in manufacturing sector

companies in the good consumer sub-sector?

13. Leverage mediates the effect of dividends on company value in manufacturing sector companies in

the good consumer sub-sector?

2. Materials and Methods

The sampling technique uses the purposive sampling method of manufacturing companies listed on

the Indonesia Stock Exchange with a research period of 2019-2021. The sampling technique used in this study

was using purposive sampling with criteria:

Table 2. Research Sample Selection

Information

Number of

Companies

Good Consumer Sub-sector Manufacturing Sector Companies on

the Indonesia Stock Exchange are listed in 2019-2021

Companies in the Manufacturing Sector of the Good Consumer

Sub-sector did not publish complete company financial

statements during 2019 – 2021 through the http://idx.co.id

website

Companies that have a negative profitability value in the

observation period

Total

Total Observation 3 years

180

Source: data processed, 2023

Based on the table above, the good consumer sub-sector manufacturing companies listed on the IDX

during the 2019-2021 period were 64 companies The number of companies that do not have complete financial

statements is 4 companies so that companies that meet the criteria are as many as 60 companies. The number

of research data and outlier data is 180 data each.

3. Results and Discussions

Variable Descriptive Statistical Test

The results of descriptive statistical testing of variables Profitability (X1), Capital Structure (X2),

Investment Decision (X3), Dividend (X4), Company Value (Y), and Levarage (Z) in the manufacturing sector

of the good consumer sub-sector listed on the Indonesia Stock Exchange in 2019-2021 are presented in the

following table:

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Validity Test Results

Convergent Validity Test Results

From table 4 it can be concluded that the outer loading values of the variables that meet the value

requirements are Profitability ratio ROA and ROE; LTDA ratio capital structure; Investment Decision PER

ratio; Company value ratio PBV and RATIO; Raiso TIE leverage whereas, what is not yet qualified is the

variable NPM profitability ratio; STDA ratio capital structure; Investment Decision MBAR ratio; Dividend

ratio of DPR and DYR; Leverage raiso DER. The following is a loading factor diagram of each indicator in

the study :

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Figure 2. Loading factor diagram

Discriminant Validity Test Results

From table 5 it can be concluded that the valid cross-loading values are the variables Profitability ratio

ROA, ROE, NPM; LTDA ratio capital structure; Investment Decision PER ratio; Dividend ratio DYR;

Company value ratio PBV and RATIO; Leverage raiso TIE, while invalid is variable Capital structure STDA

ratio; Investment Decision MBAR ratio; DPR dividend ratio; Leverage raiso DER.

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Reliability Test Results

A variable is said to be reliable if the Composite Reliability value must be greater than 0.70, in the

table above that meets the value of Composite Reliability is the Profitability variable (X1) of 0.86 and

Company Value (Y) of 0.975. A construct or variable is considered reliable if it gives a Conbarch Alpha value

of > 0.60, in the table above the variables that are declared reliable are Profitability (X1) of 0.758 and

Company value (Y) of 0.95.

Statistical Results of Hypothesis Testing

Testing the hypothesis by looking at the value of the Path Coefficient calculation in the inner model

testing. Testing hypotheses can be seen through t-statistical values and probability values. For hypothesis

testing using statistical values, it is for apha 5%, with a t-table value of 1.976, so that the criteria for acceptance

or rejection of the hypothesis are H1 accepted and H0 rejected if the t-table > 1.976. To reject / accept the

Hypothesis using probability then Hal is accepted if the value p < 0.05.

Based on the results of influence testing presented in table 8 can explain the hypothesis as follows:

H1: Profitability has a significant effect on leverage in manufacturing sector companies.

The results of the analysis in the table above show that the Original Sample value (Coefficient) is

0.064 > 0.000 with T-statistics > T-table (0.563 < 1.976) in P-value 0.574 > 0.05. then H0 is accepted and

H1 is rejected, meaning that the variable has no relationship. Thus it can be concluded that profitability has

no effect on leverage. Therefore, the first hypothesis (H1) is rejected.

H2: Capital Structure has a significant effect on leverage in manufacturing sector companies.

The results of the analysis in the table above show that the Original Sample value (Coefficient) is -

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0.231 < 0.000 with T-statistics > T-table (0.563 < 1.976) in P-value 0.033 < 0.05. then H0 is rejected and

H1 is accepted, meaning that the variable has a relationship. Thus it can be concluded that profitability is

significant to leverage. Thus the second hypothesis (H2) is acceptable.

H3: Investment Decisions Have a Significant Effect on Leverage in Manufacturing Sector

Companies.

The results of the analysis in the table above show that the Original Sample value (Coefficient) is 0.047

> 0.000 with T-statistics > T-table (0.558 < 1.976) and P-value 0.577 > 0.05. then H0 is accepted and H1

is rejected, meaning that the variable has no relationship. Thus, it can be concluded that Investment Decisions

have no effect on leverage. Therefore, the third hypothesis (H3) can be rejected.

H4: Dividends have a significant effect on leverage in manufacturing sector companies.

The results of the analysis in the table above show that the Original Sample value (Coefficient) is 0.047

> 0.000 with T-statistics > T-table (0.558 < 1.976) and P-value 0.577 > 0.05. then H0 is accepted and H1

is rejected, meaning that the variable has no relationship. Thus it can be concluded that Dividends have no

effect on leverage. Therefore, the fourth hypothesis (H4) can be rejected.

H5: Leverage has a significant effect on company value in manufacturing sector companies.

The results of the analysis in the table above show that the Original Sample value (Coefficient) is -

0.038 < 0.000 with T-statistics > T-table (0.232 < 1.976) and P-value 0.817 > 0.05. then H0 is accepted

and H1 is rejected, meaning that the variable has no relationship. Thus it can be concluded that Leverage has

no effect on leverage. Therefore, the fifth hypothesis (H5) can be rejected.

H6: Profitability has a significant effect on the value of the company in the manufacturing sector.

The results of the analysis in the table above show that the Original Sample value (Coefficient) is -

0.064 < 0.000 with T-statistics > T-table (0.983 < 1.976) and P-value 0.326 > 0.05. then H0 is rejected

and H1 is accepted, meaning that the variable has a relationship. Thus it can be concluded that profitability is

significant to the value of the company. Thus the sixth hypothesis (H6) is accepted.

H7: Capital Structure has a significant effect on the value of companies in the manufacturing

sector.

The results of the analysis in the table above show that the Original Sample value (Coefficient) is -

0.153 < 0.000 with T-statistics > T-table (2.417 < 1.976) and P-value 0.016 > 0.05. then H0 is rejected and

H1 is accepted, meaning that the variable has a relationship. Thus it can be concluded that the capital structure

is significant to the value of the company. Thus the seventh hypothesis (H7) is accepted.

H8: Investment Decisions have a significant effect on the value of companies in the

manufacturing sector.

The results of the analysis in the table above show that the Original Salmpel value (Coefficient) is

0.104 > 0.000 with T-statistics > T-table (0.934 < 1.976) and P-value 0.351 > 0.05. then H0 is rejected and

H1 is accepted, meaning that the variable has a relationship. Thus it can be concluded that Investment

Decisions are significant to the value of the company. Thus the eighth hypothesis (H8) is accepted.

H9 : Dividends have a significant effect on company value in manufacturing sector companies?

The results of the analysis in the table above show that the Original Sample value (Coefficient) is 0.062

> 0.000 with T-statistics > T-table (0.451 < 1.976) and P-value 0.652 > 0.05. then H0 is accepted and H1

is rejected, meaning that the variable has no relationship. Thus it can be concluded that dividends have no

effect on the value of the company. Therefore, the ninth hypothesis (H9) is rejected.

H10: Leverage mediates the effect of profitability on company value in manufacturing sector

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companies.

The results of the analysis in the table above show that the Original Sample value (Coefficient) is -

0.002 < 0.000 with T-statistics > T-table (0.115 < 1.976) and P-value 0.908 < 0.05. then H0 is accepted and

H1 is rejected, meaning that the variable has no relationship. Thus it can be concluded that Leverage does not

mediate the effect of Profitability on Company Value. Therefore, the tenth hypothesis (H10) is rejected.

H11: Leverage mediates the effect of Capital Structure on Company Value in Manufacturing

Sector Companies.

The results of the analysis in the table above show that the Original Sample value (Coefficient) is 0.009

> 0.000 with T-statistics > T-table (0.356 < 1.976) and P-value 0.722 < 0.05. then H0 is accepted and H1

is rejected, meaning that the variable has no relationship. Thus it can be concluded that Leverage does not

mediate the effect of Capital Structure on Company Value. Therefore, the eleventh hypothesis (H11) was

rejected.

H12: Leverage mediates the effect of investment decisions on company value in manufacturing

sector companies.

The results of the analysis in the table above show that the Original Sample value (Coefficient) is -

0.002 < 0.000 with T-statistics > T-table (0.108 < 1.976) and P-value 0.914 < 0.05. then H0 is accepted

and H1 is rejected, meaning that the variable has no relationship. Thus it can be concluded that Leverage does

not mediate the influence of Investment Decisions on Company Value. Therefore, the twelfth hypothesis

(H12) is rejected.

H13: Leverage mediates the effect of dividends on company value in manufacturing sector

companies.

The results of the analysis in the table above show that the Original Sample value (Coefficient) is 0 <

0.000 with T-statistics > T-table (0.007 < 1.976) and P-value 0.994 < 0.05. then H0 is accepted and H1 is

rejected, meaning that the variable has no relationship. Thus it can be concluded that Leverage does not

mediate the influence of Investment Decisions on Company Value. Therefore, the thirteenth hypothesis (H13)

is rejected.

DISCUSSION

The Effect of Profitability on Leverage in Good Consumer Sub-sector Manufacturing Sector

Companies.

The results of the path analysis show an Original Sample (coefficient) of 0.064 with a significance

level of 0.574 which means the path significance level is more than 0.05. Thus it can be concluded that

profitability has no effect on leverage. Profitability is a reflection of the company's ability to generate profits.

Therefore, based on Pecking Order Theory, a company that has a high profit which is a source of internal

funding will be sufficient to fund its operational costs and investment activities so that the company will

reduce the use of external funds. The higher the profitability, the lower the leverage. This research is in line

with research conducted by Zuhroh (2019), (Dilasari et al., n.d.), and (Hutapea et al., 2023) showing that

profitability negatively affects leverage.

The Effect of Capital Structure on Leverage in Good Consumer Sub-sector Manufacturing

Sector Companies.

The results of the path analysis showed an Original Sample (coefficient) of -0.231 with a significance

level of 0.033 which means the path significance level is more than 0.05. Thus, it can be implied that capital

structure affects leverage. Determination of optimal capital structure, Optimal capital structure maximizes the

share price of the company and requires a leverage ratio lower than the leverage ratio that maximizes the

expected profit per share. If based on the concept of "cost of capital", then the optimal capital structure is

defined as a capital structure that can minimize the weighted average cost of capital. Companies that are able

to meet their internal financial needs reduce their dependence on external sources.

The Effect of Investment Decisions on Leverage in Good Consumer Sub-sector Manufacturing

Sector Companies.

The results of the path analysis show an Original Sample (coefficient) of 0.047 with a significance

level of 0.577 which means the path significance level is more than 0.05. Thus, it can be concluded that

Investment Decisions have no effect on leverage, in line with research conducted by Odit & Chittoo (2008)

and (Apriyanti & Ningsih, 2023), the effect of investment decisions will affect company investment, meaning

that the greater the investment obtained by the company, it will affect the value of the company itself. Because

investors are more focused on achieving company profits. Because the achievement of high company profits

is expected to provide investors with benefits in investing in the company and this view is that the company's

high and low investment decisions do not affect the value of the company. Investment decisions are an

important factor in the financial functioning of the company, because to achieve the company's goals can be

achieved through the company's investment activities. In contrast to the research of (Ahmad et al., 2021) is

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an important determinant of investment decisions.

The Effect of Dividends on Leverage in Good Consumer Sub-sector Manufacturing Sector

Companies.

The results of the path analysis show an Original Sample (coefficient) of 0.047 with a significance

level of 0.577 which means the path significance level is more than 0.05. Thus, it can be concluded that

Investment Decisions have no effect on leverage. The higher the leverage ratio indicates the greater the

composition of debt in the company's capital structure which results in greater financial risks faced by the

company concerned. The use of debt that is too high will affect the company's capital structure and affect

interest costs (debt costs) which have an impact on the company's net profit. However, the net profit obtained

is not necessarily followed by the company's ability to pay dividends, because the obligation to pay debt takes

precedence over paying dividends. The amount of debt owned by the company will affect the dividends to be

distributed. Cash held by the company can come from debt, therefore greater debt will increase smooth

operations, investment and pay dividends. The results of this study are in line with research by (Ginting,

2019), Widjaya & Darmawan (2018), and (Butar-Butar et al., 2021) which states that leverage has no effect

on dividends.

The Effect of Leverage on Company Value in Good Consumer Sub-sector Manufacturing Sector

Companies.

The results of the path analysis showed an Original Sample (coefficient) of -0.038 with a significance

level of 0.817 which means the path significance level is more than 0.05. Thus it can be concluded that

Leverage does not affect leverage. In the theory of pecking order states that the use of higher debt will reduce

the value of the company. An increase in debt will increase the risk of the company's revenue stream, where

revenue is also affected by external factors while debt produces fixed expenses regardless of revenue. The

higher the debt, the higher the possibility of a company being unable to pay its obligations in the form of

interest and principal. The risk of bankruptcy will be higher because interest will increase, exceeding the tax-

saving benefits. This research is in line with research conducted by (Cheryta et al., 2017), (Husna & Satria,

2019), (Ajani et al., 2019), (Butar-Butar et al., 2021), Dilasari (2022) stating that leverage negatively affects

company value. In contrast to research conducted by (Astakoni & Wardita, 2020) and Tanaya &Wiyanto

(2022) leverage affects company value.

The Effect of Profitability on Company Value in Good Consumer Sub-sector Manufacturing

Sector Companies.

The results of the path analysis showed an Original Sample (coefficient) of -0.064 with a significance

level of 0.326 which means the path significance level is more than 0.05. Thus, it can be concluded that

Profitability affects the Value of the Company. This is also in line with signaling theory which explains good

financial performance in the past can provide bright company prospects in the future (Ross, 1977). A positive

signal of high profitability will attract investors to invest in the company. The more investors who invest, the

value of the company will increase. This finding is in line with previous research by Sucuahi &; Cambarihan

(2016), (Iswajuni et al., 2018), Rachmat et al (2019), Zuhroh (2019), (Ndruru et al., 2020), and Dilasari

(2023) which suggested that profitability has a positive effect on company value.

The Effect of Capital Structure on Company Value in Good Consumer Sub-sector

Manufacturing Sector Companies.

The results of the path analysis show an Original Sample (coefficient) of -0.153 with a significance

level of 0.016 which means a path significance level of more than 0.05. Thus, it can be concluded that Capital

Structure affects the Value of the Company. If the capital structure is dominated by the use of debt or from

profits, then it does not affect the rise and fall of the value of the company. Investors do not consider the

origin of the capital structure to look at investing in the company. This research is supported by Pasaribu

(2016), Mudjijah (2019), and Dilasari et al (2022) who suggest that capital structure has a positive effect on

company value. But, in contrast to research conducted by (Anggraini & MY, 2019), Irawan & Kusuma (2019)

and Rahayuningsih et al (2019) that capital structure has no effect on company value.

The Effect of Investment Decisions on Company Value in Good Consumer Sub-sector

Manufacturing Sector Companies.

The results of the path analysis showed an Original Sample (coefficient) of 0.104 with a significance

level of 0.351 which means the path significance level is more than 0.05. Thus, it can be concluded that

Investment Decisions affect the Company's Value. This means that the more an investor decides to invest in

a company does not affect the value of that company. In contrast to previous research conducted by (Efendi

& Idayati, 2020), (Astakoni & Wardita, 2020) and Dilasari et al (2022) which suggested that investment

decisions affect company value. In contrast to research conducted by Tanaya &; Wiyanto (2022) and (Bon &

Hartoko, 2022) that investment decisions have no effect.

The Effect of Dividends on Company Value in Good Consumer Sub-sector Manufacturing

Sector Companies.

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The results of the path analysis show an Original Sample (coefficient) of 0.451 with a significance

level of 0.652 which means the path significance level is more than 0.05. Thus it can be concluded that

Dividends have no effect on leverage. When investing, investors expect an increase in stock value and

dividend distribution. The distribution of dividends made by the company can be said to be a positive signal

that the company has a good performance. However, dividend policy is not a priority for investors in

considering investment decisions. In accordance with the irrelevant dividend theory proposed by Vilami

(2008) that a company's value does not depend on dividend policy, so the amount of dividends paid to

shareholders has no effect on the company's value. This may be due to a change in the view of investors who

want to obtain short-term profits through capital gains because small dividend payments are no more

profitable than capital gains in the future. The results of this study are supported by research by (Abidin et al.,

2015), Ramadhani et al (2018), (Nelwan & Tulung, 2018) and (Astika et al., 2019) which states dividends

have no effect on company value. In contrast to research conducted by (Butar-Butar et al., 2021) that dividends

have a positive impact on company value.

The Effect of Profitability on Company Value with Leverage as an Interveing Variable in

Manufacturing Sector Companies in the Good Consumer Sub-sector.

The results of the path analysis show an Original Sample (coefficient) of -0.002 with a significance

level of 0.652 which means the path significance level is more than 0.05. Thus it can be concluded that

Profitability has no effect on leverage. The results of this study are contrasted with the research of Dilansari

et al (2020), Dilasari et al (2022), and (Hutapea et al., 2023) which explains the company's financial

performance related to the use of assets and capital as well as management decisions in determining the

company's debt policy can affect the company's value. The better the company's financial performance

through a reverse debt policy can also increase the value of the company. This research is compared back to

the research of (Fajaria & Isnalita, 2018).

Capital Structure to Company Value with Leverage as an Intervening Variable in

Manufacturing Sector Companies in the Good Consumer Sub-sector.

The results of the path analysis show an Original Sample (coefficient) of 0.009 with a significance level of

0.722 which means the path significance level is more than 0.05. Thus, it can be concluded that Leverage

mediates Capital Structure to affect the Value of the Company. that the capital structure mediated by leverage

negatively and significantly affects the value of the company. This means that capital gains and utilization

are greater than debt and with a high debt policy will reduce the value of the company. Investors tend to want

capital gains from a company's financial performance profits rather than profits generated from debt because

they are also concerned about a company's ability to pay off debt. This research is in line with the research of

(Dilasari et al., n.d.) that capital structure affects company value with leverage as an intervening variable.

The Effect of Investment Decisions on Company Value with Leverage as an Intervening Variable

in Manufacturing Sector Companies in the Good Consumer Sub-sector.

The results of the path analysis show an Original Sample (coefficient) of -0.002 with a significance level of

0.914 which means the path significance level is more than 0.05. Thus it can be concluded that Leverage

mediates Investment Decisions has no effect on Company Value. This means that investment decisions have

no effect on the company’s leverage. This means that many investors who decide to invest by paying attention

to debt policies carried out by the company do not cause the company's value to increase or decrease. This

research is in line with research conducted by (Dilasari et al., n.d.) that Investment Decisions affect company

value with leverage as an intervening variable.

The Effect of Dividends on Company Value with Leverage as an Intervening Variable in

Manufacturing Sector Companies in the Good Consumer Sub-sector.

The results of the path analysis show an Original Sample (coefficient) of 0 with a significance level of 0.994

which means the path significance level is more than 0.05. Thus it can be concluded that Leverage mediates

Dividends has no effect on Company Value. This means that with the size of the use of debt, it will not affect

the size of the dividend distribution, this is because the debt owned by the company is considered not too

risky, so it does not affect funding decisions in distributing dividends. The size of the dividend distribution

will not affect the value of the company because investors only want to take profits in a short period of time

by obtaining capital gains.

4. Conclusion

Based on the analysis and discussion above, this study can conclude several things, namely: 1)

Profitability does not affect Leverage in Good Consumer Sub-sector Manufacturing Sector Companies; 2)

Capital Structure affects Leverage in Good Consumer Sub-sector Manufacturing Sector Companies; 3)

Investment Decisions have no effect on Leverage In Good Consumer Sub-sector Manufacturing Sector

Companies; 4) Dividends have no effect on Leverage in Good Consumer Sub-sector Manufacturing Sector

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IJEBSS Vol. 1 No. 06, July-Augusts 2023, pages: 511-523

Companies; 5) Leverage has no effect on Company Value ; 6) Capital Structure affects Company Value in

Good Consumer Sub-sector Manufacturing Sector Companies; 7) Investment Decisions affect the Company

Value of Good Consumer Sub-sector Manufacturing Sector Companies; 8) Dividends affect the Company

Value of Companies in the Manufacturing Sector of the Good Consumer Sub-sector; 9) Profitability has no

effect on Company Value with Leverage as an Intervening variable in Manufacturing Sector Companies of

the Good Consumer Sub-sector ; 10) Capital Structure has no effect on Company Value with Leverage as an

Intervening variable in Good Consumer Sub-sector Manufacturing Sector Companies ; 12) Investment

Decisions have no effect on Company Value with Leverage as an Intervening variable in Good Consumer

Sub-sector Manufacturing Sector Companies; 13) Dividends have no effect on Company Value with Leverage

as an Intervening variable in Manufacturing Sector Companies in the Good Consumer Sub-sector.

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