The Effect of Inventory Efficiency and Asset Effectiveness on Firm Value as Mediated by Firm Financial Performance

Abstract

Background and Objectives: Investors use financial statements as a vital tool for evaluating a company's financial position, operational effectiveness, and potential for future growth. This study aim analyze influence efficiency inventory and effectiveness asset to mark company with performance finance as variables mediation in companies subsector trading retail on the Indonesia Stock Exchange, exploring mechanism improvement market valuation through optimization source Power operational and profitability company. Research Design: Study adopt approach quantitative with design causal comparative for test connection cause and effect between variable. Location and Duration Study: Study carried out in the company subsector trading retail listed on the Indonesia Stock Exchange during five- year period, from January 2020 to December 2024. Methodology: Secondary data collected through documentation report finance annual that has been audited from 20 companies retail use purposive sampling technique, resulting in 100 units observation. Variable measured using inventory turnover to efficiency inventory, total asset turnover for effectiveness assets, return on equity for performance finance, and price to earnings ratio for mark company. Data analysis using analysis track with SPSS version 25, including assumption test classical, multiple linear regression, hypothesis testing partial and simultaneous, coefficients determination, as well as the Sobel test for test effect mediation. Results: Findings show efficiency inventory and effectiveness asset influential positive significant to performance finance with mark significance of 0.000 and 0.024 respectively. Efficiency supply influential direct to mark company with significance of 0.014, while effectiveness asset No influential significant in a way direct with mark significance 0.090. Financial performance proven influential dominant to mark company with significance of 0.000 and coefficient regression highest 196,138. Sobel's mediation test proves performance finance mediate connection efficiency supply to mark company with a p-value of 0.0000 and effectiveness asset to mark company with a p-value of 0.0210. The research model capable explains 67.3 percent variation mark company. Conclusion: Efficiency inventory and effectiveness asset increase mark company retail through improvement performance finance as mechanism mediation. Optimization management supply give signal positive direct to investors, whereas utilization asset productive need translation become superior profitability for increase market valuation. Research upcoming need explore variables external and expanding coverage sector industry for generalization findings.

Key findings

• ▸Inventory efficiency positively impacts firm financial performance.
• ▸Asset effectiveness significantly enhances overall financial performance.
• ▸Improved financial performance acts as a mediator linking operational optimization to higher market valuation.

Keywords

Identifiers

DOI

10.9734/ajeba/2026/v26i22191

Journal

Asian Journal of Economics, Business and Accounting

Year

2026