The results of this study suggest that high-value firms utilize debt in different ways
compared to low-value firms in an effort to increase their value. High-value firms
tend to use debt as an instrument to expand investment capacity and improve
operations, hoping to generate higher returns. They have better access to financing
sources and can often obtain debt at a lower cost, allowing them to utilize financial
leverage efficiently. In contrast, low-value firms are more likely to use debt to
improve liquidity and meet short-term obligations, without a strong focus on long-
term expansion. This indicates that low-value firms may be more cautious in their
use of debt, given the greater risks associated with their revenue uncertainty. As
such, high-value firms may adopt a more aggressive debt strategy to increase their
value, while low-value firms tend to use debt as a tool for financial stabilization,
which may limit their value growth potential.
What distinguishes our research is that the company value in our study is divided
into three, namely all sample companies, high company value and low company
value. The grand theory used to build this research model is Agency Theory, which
explains the relationship between managers (agents) and company owners
(principals) and the problems that arise due to conflicts of interest between the two.
This theory provides a foundation for understanding how financial policies, including
the use of liquidity and debt, as well as investment decisions, can be optimized to
maximize firm value while minimizing agency costs. As such, this study not only
explains the internal dynamics within Islamic firms, but also examines how sharia
principles can influence managerial decisions and, in turn, firm value. Overall, this
study enriches the existing literature by adding a new perspective on firm value in
the context of Islamic finance, as well as providing a new perspective on firm value.
In this study, the effect of investment on firm value is confirmed through a
significant positive relationship. Strategic investment decisions, such as capital
allocation to projects and assets with high return potential, play an important role in
increasing firm value by strengthening competitive position and increasing future
earnings. The right investment can create value for shareholders, thereby
contributing to an increase in the company^s share price and overall market value.
To convince investors to invest, companies need to implement several strategies.
Transparency in financial reports and clear communication of business performance
and projections are critical to building investor confidence. In addition,
demonstrating a good track record in risk management and the ability to generate
stable income, as well as compliance with sharia principles, can be an additional
attraction for investors seeking ethical investments. Companies can also hold
presentations and roadshows to explain their business strategy and potential
returns, thereby increasing investor interest and confidence in investing.
