Cash Holding And Internal Control Predict Mining Corporate Value Through Profitability
Abstract
General Background Corporate sustainability requires accountable governance and responsible administration. Specific Background The resource extraction sector faces severe volatility, necessitating optimal liquidity, rigorous oversight, and transparent non-financial reporting. Knowledge Gap Previous studies present inconsistent findings regarding whether sustainability disclosures, institutional monitoring, and liquidity reserves determine market capitalization through intervening financial metrics. Aims This study investigates how environmental, social, and governance reports, administrative frameworks, and liquid assets dictate market assessment, examining financial returns as a mediator in Indonesian extraction enterprises. Results Multiple regression and Sobel tests on 144 observations reveal that liquid assets significantly drive financial returns, while sustainability reporting and administrative monitoring do not. Furthermore, administrative monitoring, liquid assets, and financial returns directly dictate market assessment, whereas sustainability reporting exhibits no significant relationship. Financial returns successfully mediate the relationship between liquid assets and market assessment, but fail to mediate other variables. Novelty This research demonstrates that within volatile extraction industries, tangible liquidity reserves dictate market perception more immediately than non-financial sustainability disclosures. Implications Executives must prioritize liquidity management and rigorous administrative monitoring to maximize investor confidence and secure market capitalization. Highlights: Optimal liquidity reserves significantly dictate return on assets within resource extraction enterprises. Strict administrative oversight directly guarantees higher market assessment among financial investors. Sustainability disclosures fail to immediately translate into short-term financial returns. Keywords: Environmental Social Governance, Financial Performance, Firm Value, Internal Control System, Cash Holding