The Role of Profitability Mediates the Effect of Macro Economic Factors Capital Structure and Company Growth on Firms Value

The Role of Profitability Mediates the Effect of Macro Economic Factors, Capital Structure and Company Growth on Firm’s ValueNi Nyoman Dewi Lariantia*, Ida Bagus Anom Purbawangsaba,bFaculty of Economics and Business, Udayana University, Bali, IndonesiaaEmail: lariantidewi16@gmail.com, bEmail: gidabagus@unud.ac.idAbstractThe company's goal in a management perspective is to maximize shareholder satisfaction. The stock price in the capital market reflects the value of a company. There are many factors that affect a firm value. The purpose of this study is to determine how the role of profitability in mediating the influence of macroeconomic factors (inflation and GDP), capital structure (DER) and company growth on firm value(PER). The population numbered in this study is the textile and garment sector companies listed on theStock Exchange in the period 2013 to 2017, as many as 17 companies. The sampling method used was non-probability sampling method so that the number of samples obtained was 15 samples. The analysis technique used in this study is path analysis. The resultsof this study indicate that inflation, capital structure, and company growth have a significant positive effect on company profitability while GDP has a significant positive effect on firmprofitability. Inflation, capital structure, and company growth have a significant positive effect on value, while GDP does not have a significant positive effect on firm value. Profitability has a significant positive effect on firm value. Profitability does not significantly mediate the effect of GDP and company growthon firm value. This shows that with the addition of the profitability variable, the size of the profitability of a company does not affect inflation, GDP and company growth in increasing firm valuebut profitability significantly mediates the effect of inflation and capital structure on firm valuein the garment and textile industry companies listed on the Indonesia Stock Exchange Period 2013-2017.Keywords:Inflation;Gross Domestic Product (GDP);Capital Structures (DER);Company Growth;Firm value(PER).