<![CDATA[This study examines the effect of the Loan to Deposit Ratio (LDR) and Debt to Equity Ratio (DER) on firm value, with Return on Assets (ROA) positioned as an intervening variable, in banking companies listed on the Indonesia Stock Exchange during the 2021–2025 period. The phenomenon motivating this research is the divergence between rising intermediation and leverage activity and the declining market valuation of banking firms amid Bank Indonesia's interest rate transition. A quantitative causal-associative approach was employed, drawing on secondary panel data from ten banks selected through purposive sampling. Data were analyzed using path analysis and the Sobel test to examine both direct and indirect effects. The results show that LDR and DER each exert a significant effect on ROA, that LDR and DER significantly affect firm value as measured by Price to Book Value (PBV), and that ROA significantly affects PBV. Furthermore, ROA is found to significantly mediate the effects of both LDR and DER on firm value. These findings indicate that liquidity management and capital structure decisions influence market valuation not only directly but also through the profitability channel, lending empirical support to agency theory and signalling theory in explaining value formation in the banking sector.]]>
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