Proceedings of the 9th International Conference on Accounting, Management, and Economics 2024 (ICAME 2024)

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Effect of Operating Leverage and Financial Leverage on Firm Value through Financial Performance

Authors
Sun Dewi Putri1, *, Cepi Pahlevi1, Fauzi R. Rahim1
1Hasanuddin University, Makassar, Indonesia
*Corresponding author. Email: putrisd23a@student.unhas.ac.id
Corresponding Author
Sun Dewi Putri
Available Online 30 July 2025.
DOI
10.2991/978-94-6463-758-8_92How to use a DOI?
Keywords
Degree of Operating Leverage; Degree of Financial Leverage; Return on Asset; Return on Equity; Price to Earning Ratio
Abstract

This study aims to analyze the effect of Operating Leverage and Financial Leverage on Firm Value through financial performance as an intervening variable in the food and beverage sub-sector on the Indonesia Stock Exchange (IDX) for the 2019–2023 period. This study uses a quantitative approach with data collection methods through documentation of financial statements and company annual reports. From a population of 95 companies, a sample was drawn using purposive sampling technique based on certain criteria, so that 34 companies were selected with a total of 170 financial reports used in this study. The collected data were processed using the Smart PLS program with the Structural Equation Modeling (SEM) approach of the Partial Least Square (PLS) type. The results showed that directly Degree of Operating Leverage (DOL) and Degree of Financial Leverage (DFL) have no significant effect on Financial Performance (ROA and ROE), and both also have no significant effect on Firm Value. In addition, financial performance is proven to have a positive and significant effect on Firm Value. Indirectly, Financial Performance is not able to mediate the relationship between Degree of Operating Leverage and Degree of Financial Leverage on Firm Value.

Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 9th International Conference on Accounting, Management, and Economics 2024 (ICAME 2024)
Series
Advances in Economics, Business and Management Research
Publication Date
30 July 2025
ISBN
978-94-6463-758-8
ISSN
2352-5428
DOI
10.2991/978-94-6463-758-8_92How to use a DOI?
Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Sun Dewi Putri
AU  - Cepi Pahlevi
AU  - Fauzi R. Rahim
PY  - 2025
DA  - 2025/07/30
TI  - Effect of Operating Leverage and Financial Leverage on Firm Value through Financial Performance
BT  - Proceedings of the 9th International Conference on Accounting, Management, and Economics 2024 (ICAME 2024)
PB  - Atlantis Press
SP  - 1130
EP  - 1148
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-758-8_92
DO  - 10.2991/978-94-6463-758-8_92
ID  - Putri2025
ER  -