Abstract
The level of firms’s ability to create value relative to invested capital (LACVIC) is proxied by Price to Book Value Ratio. Price to Book Ratio is also a proxy of firm value. The purpose of this study was to examine the effect of growth, profitability, size and assets tangibility on the level of firm’s ability to create value with probability of financial distress as an intervening variable. This study was conducted on public companies in Indonesia during the periods of 2013 – 2017. The panel data were analyzed by using Partial Least Square. Results indicate that assets tangibility has positive and significant effect on financial distress probability. Financial distress probability has no significant effect on LACVIC. Profitability, firm size, and assets tangibility have significant effects LACVIC directly, but they have no significant effect on it trough financial distress probability. It is indicating that financial distress probability does not act as an intervening variable. The implication is that companies should not have much assets tangibility because it can increase financial distress probability and decrease LACVIC