<![CDATA[This study aims to analyzed the effect of liquidity and activity ratio on the profitability of companies in the pharmaceutical industry listed on the IDX for the period 2019–2025. Profitability is measured by Return on Assets (ROA), while liquidity is measured by the Cash Ratio and solvency is measured by Debt to Assets Ratio (DAR). The study utilizes a quantitative approach with multiple linear regression analysis. The population consists of companies with pharmaceutical subsector, while the sample was selected by using purposive sampling. The results indicate that liquidity (Cash Ratio) has no significant effect on profitability. Meanwhile, solvability (DAR) has a significant negative effect on profitability, this result supporting the Trade-off Theory. Liquidity and solvability simultaneously had significant effect on profitability. This research could widen the insights for management regarding the optimal use of debt to maintain financial performance, particularly following the fluctuations observed during the 2022–2023 period for pharmaceutical industry.]]>
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