The Impact of Leverage on Firm Value By Mediation of Profitability (Case Study of Consumer Non-Cyclical Companies Listed on the Indonesia Stock Exchange for the 2014-2023 Period)

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Analysis reveals leverage negatively affects firm value in non-cyclical consumer sector, suggesting profitability's limited mediating role.

Leverage negatively impacts firm value, indicating potential financial risk for companies.
Hypothesis testing shows that leverage has a notable negative effect on profitability.
Path analysis utilized classical assumption tests and SPSS 23 for data evaluation across the study period.
Findings suggest signaling theory does not adequately explain the dynamics between leverage, profitability, and firm value.

Viki et al. (2025) studied this question.

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Analysis reveals leverage negatively affects firm value in non-cyclical consumer sector, suggesting profitability's limited mediating role.