Analysis the Influence of Liquidity, Solvency Activity and Profitability on Profit Growth
DOI:
https://doi.org/10.70550/joseb.v2i4.165Keywords:
Current Ratio, Debt to Equity Ratio, Total Asset Turnover, Return on Asset, Profit GrowthAbstract
Objectives: The aim of this research is to reveal that agricultural sector plays a crucial role in strengthening Indonesia's economic stability and ensuring food security. Despite this, profit growth in companies within this sector showed variability during the 2019–2023 period.
Methodology: This study investigates the influence of the Current Ratio, Debt to Equity Ratio, Total Asset Turnover, and Return on Assets on profit growth. Employing a causal research design, the study population comprised 46 agricultural companies. Fifteen companies were purposively selected as samples. Data analysis was performed using panel data regression through Eviews 13 software.
Findings: The findings reveal that the Current Ratio and Total Asset Turnover do not have a significant impact on profit growth, whereas the Debt to Equity Ratio and Return on Assets positively and significantly affect profit growth. These results are intended to provide guidance for companies and investors in formulating financial strategies that promote sustainable profit growth in the agricultural sector.
Conclusion: The empirical results reveal that CR and TATO do not exert a significant influence on profit growth, while both DER and ROA have a positive and measurable effect. These findings underscore the strategic importance of managing leverage and asset profitability, particularly through optimizing their performance.
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