Analysis of the Effect of Liquidity Ratios, Solvency and Activity on the Financial Performance of the Company (Literature Review of Corporate Financial Management)

Authors

  • Jessica Medeline Effendie Master of Management Program at Widya Mandira Catholic University Kupang
  • Henny A. Manafe Lecturer of Master of Management Study Program at Widya Mandira Catholic University Kupang
  • Stanis Man Lecturer of Master of Management Study Program at Widya Mandira Catholic University Kupang

DOI:

https://doi.org/10.38035/dijefa.v3i5.1507

Keywords:

CR, DER, InvTO, TATO

Abstract

This article reviews the influence that aims to really know about liquidity ratios, slovability, and activities that affect the company's financial performance. Liquidity is proxied by current ratio (CR), solvability is proxied by debt to equity ratio (DER), activity is proxied by inventory turnover (InvTO) and total asset turn over (TATO), while the company's financial performance is proxied by return on equity (ROE).  This article was written in order to determine the hypothesis of the influence between variables that can be used in subsequent research. The results of the library research are: 1) Current ratio (CR) separately affects return on equity (ROE); 2) Debt to equity ratio (DER) has a separate impact on return on equity (ROE); 3) Inventory turn over (InvTO) has a separate effect on return on equity (ROE); 4) Total asset turn over (TATO) has a partial impact on return on equity (ROE); 5) CR, DER, InvTO, TATO simultaneously have a positive effect on ROE.

References

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Utami, W. B., and Pardanawati, S. L. (2016). The Effect of Liquidity, Solvency and Asset Management on Financial Performance in Public Listed Companies in Kompas 100 in Indonesia. Journal of Accounting and Taxes, 17(01), 63.72.

Wahyuni, A. N., & Suryakusuma, K. H. (2018). Analysis of Liquidity, Solvency, And Company Activity Towards Profitability In Manufacturing Companies. Journal of Management, 15(1), 1–17. https://doi.org/10.25170/jm.v15i1.95

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Published

2022-12-13

Issue

Vol. 3 No. 5 (2022): Dinasti International Journal of Economics, Finance & Accounting (November - December 2022)

Section

Articles

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