<![CDATA[In state-owned enterprises, balancing financial performance with public service mandates remains a critical challenge, particularly when government compensation policies directly affect corporate operations. Public Service Obligation (PSO) is designed to ensure the provision of essential services to society; however, its implications for the financial performance of state-owned enterprises require comprehensive empirical examination. This study aims to analyze the effect of Public Service Obligation (PSO) on the financial performance of subsidized State-Owned Enterprises (Badan Usaha Milik Negara/BUMN) in Indonesia during the 2020–2024 period. The research adopts a quantitative approach using secondary data collected through documentation of published annual reports and financial statements. The population consists of all BUMN receiving PSO, with purposive sampling applied to select seven enterprises that consistently received PSO and disclosed complete financial data. The study focuses on Indonesia as the research setting and examines financial performance through Return on Assets (ROA), Return on Equity (ROE), and the Current Ratio. Data analysis is conducted using descriptive analysis, simple linear regression, and hypothesis testing through t-tests and F-tests. The findings indicate that PSO exerts a significant influence on the financial performance of BUMN. PSO contributes positively to asset-based profitability and short-term liquidity, while exhibiting a negative relationship with equity-based profitability. These results highlight the inherent trade-off between public service responsibilities and financial efficiency within state-owned enterprises. The study implies that policymakers and BUMN management must design PSO compensation mechanisms that not only ensure service sustainability but also preserve financial performance, particularly capital efficiency and liquidity stability.]]>
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