OPTIMIZATION OF INTELLECTUAL CAPITAL AND FINANCIAL PERFORMANCE AS DRIVERS OF COMPANY VALUE

Abstract

This research seeks to analyze the influence of Intellectual Capital (IC) and financial performance on firm value within Indonesia’s Property and Real Estate sector listed on the Indonesia Stock Exchange (IDX) during the period 2021–2023. Intellectual Capital is assessed using the Value Added Intellectual Coefficient (VAIC), while financial performance is represented by Return on Assets (ROA) and Return on Sales (ROS). Firm value is measured by the Price to Book Value (PBV) ratio. Employing a quantitative causal approach and the Partial Least Squares analysis technique, the results indicate that VAIC, ROA, and ROS have a positive and significant effect on PBV. These findings reinforce agency theory, suggesting that sound financial performance serves as a signal of managerial efficiency, and support stakeholder theory, which posits that effective intellectual capital management enhances corporate legitimacy and stakeholder trust. Overall, the synergy between intellectual capital utilization and strong financial performance plays a crucial role in strengthening firm value and ensuring long-term business sustainability.

Keywords: intellectual capital, financial performance, firm value