The Influence of Liquidity and Activity on the Profitability of Industrial Sector Companies Listed on the IDX

Juliansah Pratama; Rismansyah Rismansyah; Hendri Saladin

doi:10.31851/jmwe.v23i3.22363

Authors

Juliansah Pratama
Rismansyah Rismansyah
Hendri Saladin

DOI:

https://doi.org/10.31851/jmwe.v23i3.22363

Abstract

The objective is to determine whether liquidity and activity partially or simultaneously affect profitability in industrial sector companies listed on the IDX. The problem in this research regarding the relationship between liquidity, activity, and profitability can be seen in several industrial sector companies listed on the Indonesia Stock Exchange, showing fluctuations in the company's liquidity, activity, and profitability ratios. Some companies have high liquidity but relatively low profitability, which indicates that the company's ability to meet short-term obligations is not always followed by the ability to generate profits and there are companies with high levels of asset activity that produce high profitability, as well as unstable asset use efficiency.The research method uses descriptive statistics with the SPSS program. The results of the research findings, namely the results of partial testing or t-test of liquidity on profitability, state that liquidity does not have a significant effect on profitability. The results of partial testing or t-test of activity on profitability state that activity has a significant effect on profitability. The results of simultaneous testing (F) or together (ANOV) state that liquidity and activity have a simultaneous effect on profitability in industrial sector companies listed on the IDX.

Keywords:

Liquidity Ratio, Activity, Profitability, Financial Ratios

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