Analysis of Net Profit Margin, Return on Asset, Inflation on CAR and Fintech Firm Value

This study explores the relationship between capital adequacy and financial stability within Indonesian fintech companies operating under a dynamic economic environment. The research addresses challenges related to technology development costs and risk management, particularly credit and cybersecurity risks. Investments in digital technology, while essential, can sometimes result in downturns that limit banks’ ability to raise capital and extend credit, thereby affecting economic growth. Accordingly, this study examines the impact of Net Profit Margin (NPM), Return on Assets (ROA), and inflation on the Capital Adequacy Ratio (CAR) and fintech firm value. A quantitative approach was employed using secondary data from audited annual reports of fintech companies listed on the Indonesia Stock Exchange for the period 2019–2023. The data were analyzed using the Smart Partial Least Squares method, incorporating NPM, ROA, inflation, CAR, and fintech firm value as variables. The results indicate that NPM, ROA, and inflation positively influence fintech firm value, and these effects are further strengthened when moderated by CAR. Practically, fintech companies should prioritize both profitability and capital ade-quacy to enhance investor confidence and maintain corporate stability in uncertain economic conditions. This study contributes to the literature by identifying key determinants of capital adequacy and financial stability and offers directions for future research on the long-term effects of regulatory reforms on the profitability and sustainability of Indonesian fintech companies.