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Journal : west science business and management

Analysis of the Effect of Liquidity, Leverage, and Profitability on the Financial Performance of Companies in the Indonesian Capital Market Rahmanto, Basuki Toto; Lasmiatun, KMT; Ar, Nursyam; Toalib, Ramli; Syamsinar, Syamsinar
West Science Business and Management Vol. 2 No. 04 (2024): West Science Business and Management
Publisher : Westscience Press

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.58812/wsbm.v2i04.1499

Abstract

This study examines the influence of leverage, liquidity, and profitability on the financial performance of companies listed on the Indonesian Capital Market. A quantitative approach was utilized, involving 150 companies, with data measured using a Likert scale (1–5) and analyzed using Structural Equation Modeling-Partial Least Squares (SEM-PLS 3). The findings reveal that leverage and profitability significantly and positively impact financial performance, with profitability demonstrating the strongest effect. Liquidity also positively influences financial performance, albeit to a lesser extent. Collectively, the three variables explain 62% of the variance in financial performance, highlighting their interdependence and critical role in driving firm success. The study provides valuable insights for corporate managers and policymakers in emerging markets, emphasizing the importance of strategic financial planning to ensure sustainable growth.
Co-Authors Abdul Majid Abdurrachman , Achmad Agusalim Juhari Alam, Andi Rifqah Purnama Allo, Aguinalty Sofia Rante Amlus, Mohammad Harith Amrullah, Nursinah Andi Sumardin, Andi Ar, Nursyam Arham, Andi Arianto, Halil Asmawiyah Asmawiyah Awaluddin Yunus, Awaluddin Basar, Nur Fatawa Baso Jabu, Baso Basuki Toto Rahmanto Buhati Asfyra, Intan Busman Busman, Busman Darsul S Puyu Fana, Devi Nurul Firdaus, Andi Mulawakkan Firdayana Firdayana Fitriani Fitriani Fitriani, Putri Diesy Hardianti Ilyas, Diyan Harjuna, Hariani Helda Ibrahim Husni Mubarak Ibrahim , Helda Ikram, Muhammad Ilyas, Abustani Inayanti Fatwa Indrayani Simpuruh Intan Buhati Asfyra Ismi, Nur Jafar, Adindah Novihartina Jamaluddin Jamaluddin Juwita Yusuf, Marwah Kalla, Nuratika Rahmat Kapriani Kapriani, Kapriani Khaeruddin KHALISHAH, KHANSA La Sumange Lasmiatun, KMT Lawang, Hasanna Lukman Hakim Ma'ruf, Adnan Ma'shum, Muhammad Maemuna Muhayyang Mariantika, Elena Misbahuddin Misbahuddin Misbahuddin Misbahuddin Muhammad Isbar Pratama Muhammad Nur Maallah Muhammad Syarifuddin Rahman Munir Munir, Munir Murni Mahmud Muthahharah, Isma Nasharuddin Nur Aisyah Nur Alim Nur Fatwa Basar Nur Ismiyati Nur, Fadhilah Nurapidah, Nurapidah Nurhimaya, Nurhimaya Nurjanna Nurjanna Nurlaila Hasmi Nurlinda Nurlinda, Nurlinda Pasinggi, Yonathan S Prasiefa, Mizanurafi’ Ghifarhadi Pratiwi, Alifiah Purnama Alam, Andi Rifkah Qudratullah, Qudratullah Rahedin Suwo Rahmatiah Rahmatiah Rahmawati Tamrin, ST. Ray Suryadi, Ray Rohiman, La Ode Rusdianto Rusdianto, Rusdianto Sa'diyyah, Fadhilah Nur Sadiyyah Sahruddin, Sahruddin Said, Amal Sa’diyyah, Fadhilah Nur Simpuru, Indrayani Siti Nuryati St. Nurhayati Ali Sukmawati Atjo, Andi Sulolipu, Andi Annisa Sumange, La Syamsul Rahman, Syamsul Syarifuddin Dollah T. Baso, Andi Kasirang Taskirah, Andi Thahir, Rahmatia Toalib, Ramli Wahyuni, Maya Sari Wayan Rumite Yusuf, Marwah Juwita