THE INFLUENCE OF LIQUIDITY RATIOS AND SOLVENCY RATIOS ON FINANCIAL PERFORMANCE IN MANUFACTURING COMPANIES LISTED ON THE INDONESIAN STOCK EXCHANGE (PERIOD 2020-2022)
Abstract
This study aims to determine the effect of liquidity ratios and solvency ratios on financial performance in manufacturing companies listed on the Indonesia Stock Exchange (2020- 2022 Period). The data in this study were obtained from financial reports that have been published by the company and obtained from the Indonesia Stock Exchange with the time period 2020-2022. The population in this study were industrial sub-sector companies listed on the IDX and the sample in this study used a saturated sample of 30 companies. The analysis method used in this research is multiple linear regression, t test and f test to obtain results regarding the effect of the independent variable on the dependent variable. The results showed that the Liquidity Ratio as measured using the Current Ratio has a positive effect on Financial Performance as measured using Return On Asset. The Solvency Ratio as measured using Debt to Equity has a positive effect on Financial Performance as measured using Return On Asset. Liquidity Ratio and Solvency Ratio simultaneously affect Financial Performance. The coefficient of determination (????2) shows that the Liquidity Ratio and Solvency Ratio variables have an influence of 21.50% on Financial Performance. While the remaining 78.50% is influenced by other factors not discussed in this study.
