The Effect of DER and Firm Size on PBV, with ROA as a Mediating Variable, Among FnB Companies

Abstract

This study aims to analyze the effect of the Debt-to-Equity Ratio (DER) and Firm Size on the Price-to-Book Value (PBV), with Return on Assets (ROA) as a mediating variable, among companies in the Food and Beverage subsector listed on the Indonesia Stock Exchange for the period 2022–2025. Global economic volatility affects the ability of domestic Food and Beverage (F&B) companies to generate profits, which in turn impacts investor confidence in capital investment. This study employs a quantitative, explanatory approach. The study population consists of companies in the Food and Beverage subsector listed on the Indonesia Stock Exchange, from which a sample of 57 companies was selected through purposive sampling. This study uses secondary data in the form of companies’ annual financial reports, which were then analyzed using multiple regression and path analysis in SPSS to test the direct and indirect effects between variables. The results show that the Debt-to-Equity Ratio (DER) does not have a significant effect on Return on Assets (ROA), while Firm Size has a positive and significant effect on ROA. Furthermore, the Debt-to-Equity Ratio (DER) has a positive and significant effect on Price-to-Book Value (PBV); Firm Size has a negative and significant effect on PBV; and Return on Assets (ROA) has a positive and significant effect on PBV. The mediation test indicates that ROA does not mediate the effect of DER on PBV but partially and competitively mediates the effect of Firm Size on PBV. These findings suggest that increased profitability is an important mechanism in explaining the relationship between firm size and firm value, whereas the relationship between capital structure and firm value is predominantly direct.