The Effect of Profitability, Liquidity, Capital Structure, and Financial Distress on Firm Value Before and During the COVID-19 Pandemic

Abstract

The purpose of this study is to examine the effect of profitability, liquidity, capital structure, and financial distress on firm value before and during the COVID-19 pandemic, as well as to identify differences in the influence of these variables on firm value among restaurant, hotel, and tourism sub-sector companies listed on the Indonesia Stock Exchange during the 2018–2021 period. This study uses secondary data obtained from the financial statements of selected companies and employs multiple linear regression analysis. The findings indicate that profitability had a negative and insignificant effect on firm value before the COVID-19 pandemic but showed a positive and insignificant effect during the pandemic. Liquidity also had a negative and insignificant effect before the pandemic and a positive but insignificant effect during the pandemic. Capital structure demonstrated a significant positive effect on firm value both before and during the COVID-19 pandemic. Meanwhile, financial distress had a significant positive effect on firm value before the pandemic but showed a significant negative effect during the pandemic. Furthermore, the study reveals that there is no significant difference in firm value between the periods before and during the COVID-19 pandemic.