Capital structure:

Capital structure is the combination of the debt and equity capital that composite a firm’s financing its assets. Financing is referred to as a process of generating cash which can be used for acquisition of assets, current operations or any expected growth. Firms can use either debt or equity capital to finance their assets. Therefore, capital structure can be written as the sum of net worth plus preferred stock plus long term debt . Besides these sources of finance, enterprise may issues hybrid securities such as income bonds. These hybrid securities possess the feature of both equity and debt securities. The capital structure decision is an important decisions as it influences the investors return on their investment, it is therefore obligatory on the management of company to make appropriate capital structure so to maintain the interest of its investors.

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Managerial Ownership:
Managerial ownership is part of corporate governance where the manager is involved in shared ownership or can be called a shareholder. This managerial ownership will be stated as a percentage base on the percentage of a company’s share that manages, commissioners and directors belonged to the year ending. In this paper, it is assumed that the management would make every effort to serve the interests to the shareholders the greater the managerial ownership. The management will also earn if the business is profitability (Bintara, 2018).
Firm profitability:
Profitability measure the company’s ability to generate profits. According to Brigham and Houston (2006:107) explain that the profitability as follows: Profitability is the end result of a number of policies and the decision made by the company. A profitability ratio is the study is represented by return on equity ( ROE). REO is a ratio in that show the rate of return earned on the owner or shareholder box the investment in the company. REO is comparing the magnitude of net income to commons stock equity. The higher the REO show that the higher the rate of return on the investment made and the lower REO of a company then the rate of return will be low. A prospective investors should look at the REO of a company before deciding to invest in order to know how much that will be generated from investment. The higher the level of profit, the company ability to pay dividends will also be higher and the company’s stock price will increase. In addition , the company’s value can be seen on the company’s ability to pay dividends. Dividends is the proportion of profit that are distributed to the shareholder in an amount that is proportional to the number of shares that owned (Sunariyah, 2004). There are times when the dividend is not distributed by the company because the company felt the need to reinvest the profit earned. The amount of the dividend may affect the stock price. If dividend are paid is high, stock prices tend to be high so that the value of the company is high and if the dividend paid to shareholders of the smaller company’s stock price of the share is also low. The ability of a company to pay a dividend is closely related to the ability of the company make a profit. If the company makes a profit is high, them the a bit of the company will pay dividend too high with huge dividend will increase the value of the company (Harjito and Martono, 2005).
The Effect of Profitability on Firm Value
Test results showed that profitability has a significant positive impact on enterprise value. A company that can increase profits indicates that the company is doing well and can add value to the company. This results can be explained by signaling theory. A high level of profitability achieved by a company can generate positive sentiment among investors. Investors see this as a positive signal. Investors will respond by purchasing shares in the company. When many investors buy shares in a company, the stock price indicates that the corporate value has also increased.
The results of this study are in line with research conducted by ( Riki et al., 2022), (N.Putri & Budyastuti, 2021).(Saleh , 2020), and (Sari, 2020), which shows the results that profitability has a positive effect on firm value.

Effect of Capital Structure on Firm Value
The results which show that a company’s capital structure does not significantly affect it’s value. Funding decision within the company are related to the company’s decision to use the funds. A company’s high and low capitalization cannot affect it’s value as long as the profits that are the results of it’s funding decision are high. Based on the theory of MM without tax, it states that capital structure does not affect corporate value. His MM theory of tax exemption has several assumptions, one of which he suspect investors have the same information as management about the company’s future. This theory explains the lack of a proper relationship between capital structure and company value. It is the level of profit as well as investment decisions that will affect the value of the Hanafi company (2018). This result follows the results of research conducted by Irawan & Nurhadi (2016).
The multiple linear regression analysis showed that the independent variables, DER and ROA, had a significant effect on firm value when analyzed simultaneously. The regression equation indicated that an increase in the DER nor the ROA variable would lead to an increase in the firm value. However, when analyzed individually, neither the DER nor the ROA variable had a significant effect on firm value. The coefficient of determination (R2) showed that the contribution of the DER and ROA variable to firm value was 52.1%. These findings suggest that it is essential to consider both capital structure and profitability when evaluating the firm value. These results can be used by investors and financial analysis to make informed decisions when investing in Inducement Tunggal Prakarsa, Inc.
The Effect of Managerial Ownership on Firm Value
Managerial Ownership is the composition of the number of managerial shares in proportion to where management has the same authority as other shareholders in managing the company. This managerial ownership aims to reduce agency conflict because managers with right to company shares will affect managerial shares will managers performance to improve company performance (Widyasari, Mukzam, & Prasetya, 2015).Agency theory states that if the number of manager’s shares is high, management will optimize the use of resources to achieve the company’s interests. However, if the share ownership is lower, managers will try to maximize their performance for their benefit ( Nurwahidah, Human, & Outta, 2019). Empirical evidence ( Kusumawati & Setiawan, 2019), (Nurwahidah et al., 2019), (Widianingsih, 2018) , (Susilawati & Rakhman, 2018) proves that managerial ownership can affect firm value. Manager have more contributions through shares ownership, so managers will optimize their business so that shares value rise and maximize profits of increase firm value.
The king of study, known as causality research look at the connections between the dependent variable & independent variable. In which the depend variable is firm value which is depended upon the three independent variable firm profitability, capital structure and managerial ownership. This quantitative research utilize secondary data from the banking statement of firm that act as sampling techniques employed in this research is purposive sampling, which is non-probability sampling techniques. To ensure the study conducted classical consumption test, inducting auto correction test, heteroscedastic test, normality test involved. Simple linear regression, multiple linear regression methodology employed in the study cleave to standard journal international journal requirements and provide valid information for further analysis.
Dependent Variable
Firm Value
Investors perception of how business might improve their chance of success are frequently linked to stock price. High stock price can also results in a high corporate value or company price if sold to interested parties or stakeholders (Murwaningsari & Ardi, 2018).
Tobin’Q= Total Market Value+Total Book Value of Liabilities
Total Book Value of Assets
Independent variable
How well the business handle these assets to produce profits ma be determined by comparing the value of assets and net income. ( Atidhira & Yustina, 2017).
ROA=Earning After Tax
Total Assets
Managerial Ownership
Percentage of management shares owned by those with voting rights in the firm ( commissioner and directors) ( Nurkhin et al., 2017).
KM=Number of shares owned by management
Outstanding shares
Capital Structure
Proportion in fulfilling company spending needs with long term funding sources originating from internal funds and external funds ( Savitri & Irwansyah, 2021).
DER=Total Liability
Total Equity
Hypothesis Test Results
Hypothesis Significance Test Criteria (accepted or rejected) Results
H1: Profitability positively and significantly affect the firm’s value. 0.0000<0.05 Accepted Profitability has a significant positive effect on the value of the firm.
H2:The capital structure has a significant positive effect on the firm’s value. 0.1513>0.05 Rejected Capital structure does not affect the value of the firm.
Managerial ownership is positively related to the firm value 0.05181>0.05 Accepted Managerial ownership has significantly positive effect on firm value.

Conceptual framework of research
Based on the problem formulation, theoretical studies, relevant previous research and discussion of the influence between variable, the frame work of thinking in this article is as follows.






Based on the description of the conceptual framework above, then: profitability, company size, and capital structure affect the value of the company. There are many other variable that can affect a company’s value aside from profitability, company size and capital structure. Other variable that can affect a company include:
⦁ Earning per share (Nur kholis, Eka Dewi, Hestin, 2018)
⦁ Managerial share will effect the performance of firm (Widyasari, Mukazan, & Prasetya 2015)
⦁ Assets structure (Meiriska Febrianti, 2012)
Corporate value is often related to good or bad prospects of a company. The survey proved that profitability is positive signal perceived by investors. Investors are responding positively by buying shares in companies that can add value to the company. Capital structure cannot increase corporate value. Managerial ownership also effect the corporate value. If the managerial shares is high, management will use the company resources effectively. When the variable were analyzed together, the study found that DER & ROA had a significant effect on firm value indicating that they work together to impact the firm value.
Normality Test
Normality test are used to determine if a data set is well – moderated by a normal distribution and to compute how likely it is for a random variable understanding the data set to be distributed. According to Ajija Shochrul R ; sari, Dyah W; Sentianto, Grace H ; Primanti (2011) States that testing using panel several advantages. One of these advantages is that it is Symmetric and bell- shaped is get around the problem of non normal dat, statistics recommend using sample mean rather than individual unit.
Auto correlation test
The value of auto correlation range from-1 to1. A value between -1 and 0 represent negative auto correlation . A value between 0 and 1 represent positive auto correlation. Auto correlation gives information about the trends of a set of historical data so that it can be useful in the technical analysis for that

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