The Effect of Leverage and Company Size on Company Value in Basic and Chemical Industry Sector Companies on the Indonesia Stock Exchange in 2023-2024

Abstract

This study aims to analyze the effect of leverage and company size on company value in basic and chemical industry companies listed on the Indonesia Stock Exchange for the 2023–2024 period. This study uses a quantitative approach with multiple linear regression analysis. Leverage is measured using the Debt to Equity Ratio (DER), company size is measured by the natural logarithm of total assets (Ln Total Assets), while company value is measured using Price to Book Value (PBV). The study population consists of 114 basic and chemical industry companies listed on the Indonesia Stock Exchange. The research sample was determined using a purposive sampling technique to obtain 85 companies that meet the criteria. The data used are secondary data obtained from annual financial reports and stock prices through the official website of the Indonesia Stock Exchange. Data analysis includes descriptive statistics, classical assumption tests, multiple linear regression analysis, t-tests, F-tests, and coefficient of determination (R²) tests. The results show that partially, leverage and company size do not have a significant effect on company value. Simultaneously, leverage and company size also do not have a significant effect on company value. The Adjusted R Square value of 20.2% indicates that leverage and firm size explain 20.2% of the variation in firm value, while the remaining 79.8% is influenced by variables outside the research model. This finding indicates that leverage and firm size are not yet strong signals for investors in assessing a company, and therefore, investment decisions tend to be influenced by other fundamental factors.