Proceedings of the 1st International Conference on Economics and Business, ICEB 2023, 2-3 August 2023, Padang, Sumatera Barat, Indonesia

Research Article

The Effect Of Liquidity And Leverage Ratio On The Financial Performance Transportation Sub-Sector Companies Listed On The Indonesia Stock Exchange In 2018-2021

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  • @INPROCEEDINGS{10.4108/eai.2-8-2023.2341846,
        author={Megawati  Amelia Putri and Leli  Suwita and Tri Irfa  Indrayani and Fitri  Kurnia},
        title={The Effect Of Liquidity And Leverage Ratio On The Financial Performance Transportation Sub-Sector Companies Listed On The Indonesia Stock Exchange In 2018-2021},
        proceedings={Proceedings of the 1st International Conference on Economics and Business, ICEB 2023, 2-3 August 2023, Padang, Sumatera Barat, Indonesia},
        publisher={EAI},
        proceedings_a={ICEB},
        year={2024},
        month={6},
        keywords={liquidity ratio leverage ratio an financial performance},
        doi={10.4108/eai.2-8-2023.2341846}
    }
    
  • Megawati Amelia Putri
    Leli Suwita
    Tri Irfa Indrayani
    Fitri Kurnia
    Year: 2024
    The Effect Of Liquidity And Leverage Ratio On The Financial Performance Transportation Sub-Sector Companies Listed On The Indonesia Stock Exchange In 2018-2021
    ICEB
    EAI
    DOI: 10.4108/eai.2-8-2023.2341846
Megawati Amelia Putri1,*, Leli Suwita1, Tri Irfa Indrayani1, Fitri Kurnia1
  • 1: Universitas Muhammadiyah Sumatera Barat
*Contact email: megawatiameliaputrii@gmail.com

Abstract

This research aims to examine the effect of liquidity and leverage on the financial performance of transportation sub-sector companies listed on the Indonesia Stock Exchange in 2018-2021. Data analysis techniques used was the Structural Equation Model (SEM) method. SmartPLS software is used for the analysis tool. Liquidity ratio indicators (X1) include current ratio, quick ratio, and cash ratio. Leverage ratio indicators (X2) include debt ratio, debt to equity ratio, and long term debt to equity ratio. While financial performance is an endogenous variable in this study, the indicators are return on investment, return on equity, and net profit margin. The study shows that the liquidity ratio has an effect on financial performance because t-statistic is 3,47 and the p-value is 0,00, while the leverage ratio has no effect on financial performance because the t-statistic is 0,425 anf the p-value is 0,671