Determinants of Firm Value: Evidence from Consumer Cyclical Companies Listed on the Indonesia Stock Exchange

Objective: This study was designed to examine how profitability, as measured by Return on Assets (ROA), the implementation of Good Corporate Governance as represented by the proportion of independent commissioners, and firm size influence firm value, as measured by Tobin’s Q, with a focus on companies in the consumer cyclicals sector listed on the Indonesia Stock Exchange. Research Design & Methodology: The approach used is a quantitative associative one with secondary data in the form of annual financial reports. From a population of 157 companies in the consumer cyclicals sector for the 2018–2022 period, 47 companies were selected as the sample through purposive sampling, resulting in a total of 235 observations. Data analysis was conducted using panel data regression, preceded by model selection tests (Chow and Hausman) and classical assumption tests. Findings: The results indicate that profitability has a positive effect on firm value, while Good Corporate Governance was not found to have a significant effect. Conversely, firm size has a negative effect on firm value. Simultaneously, these three variables have a positive and significant effect on firm value, explaining 75.2088% of the variation in firm value. Contribution: These findings provide an empirical perspective for both investors and corporate management regaing the factors relevant to assessing the prospects of companies in the consumer cyclicals sector, particularly during the recovery period following the COVID-19 pandemic. Novelty: This study enriches the empirical evidence regarding the inconsistencies in previous research findings on the effects of profitability, good corporate governance, and firm size on firm value, by highlighting the potential for a size effect anomaly in the consumer cyclicals sector in Indonesia.