Financial Performance Determinants: Capital Structure, Liquidity, Solvency, and Asset Turnover

Ramadani, Monica Ginggi Putri
Andarwati

Jurnal Management Risiko dan Keuangan
Vol. 5 No. 2 (2026)

Purpose – This study aims to analyze the effects of capital structure, liquidity, solvency, and asset turnover on the financial performance of food and beverage companies listed on the Indonesia Stock Exchange (IDX) during the 2021–2023 period. The research seeks to identify the financial factors that contribute to improving corporate profitability, measured by Return on Assets (ROA). Design/Methodology/Approach – This study employs a quantitative research approach using panel data regression analysis. The research utilizes secondary data obtained from annual financial statements of food and beverage companies listed on the IDX. The independent variables include Debt to Equity Ratio (DER) as a measure of capital structure, Current Ratio (CR) as a liquidity indicator, Interest Coverage Ratio (ICR) as a solvency measure, and Asset Turnover Ratio (ATR) as an indicator of asset utilization efficiency. Model selection was conducted using the Chow test and Hausman test among the Common Effect Model (CEM), Fixed Effect Model (FEM), and Random Effect Model (REM). Findings – The findings show that solvency measured by the Interest Coverage Ratio (ICR) has a positive and significant effect on financial performance measured by ROA. Meanwhile, capital structure (DER), liquidity (CR), and asset turnover (ATR) do not have a significant partial effect on ROA. Simultaneously, all independent variables significantly influence financial performance. These results indicate that the ability to meet interest obligations plays a more important role in improving profitability compared with capital structure composition, liquidity position, or asset utilization efficiency. Originality/Value – This study contributes to corporate finance research by examining the combined effects of capital structure, liquidity, solvency, and asset utilization on financial performance within the food and beverage sector in Indonesia. The findings provide practical implications for managers in developing financial strategies, particularly regarding effective debt management and profitability improvement.