The Effect of Asset Efficiency, Liquidity, And Working Capital Turnover on Financial Performance of Manufacturing Companies In The Basic and Chemical Industry Sub-Sectors Listed on The IDX In The 2021–2024 Period

Melia Hotnida Tambunan; La  Ane

doi:10.63922/ijbqr.v4i04.5487

Melia Hotnida Tambunan Universitas Negeri Medan, Indonesia
La Ane Universitas Negeri Medan, Indonesia

DOI: https://doi.org/10.63922/ijbqr.v4i04.5487

Keywords: Asset Efficiency, Liquidity, Working Capital Turnover, Financial Performance

Abstract

Financial performance is an important indicator in assessing a company's success in managing its resources. However, the financial performance of manufacturing companies in the basic industry and chemical subsector listed on the Indonesia Stock Exchange has fluctuated from year to year. In addition, previous studies examining the effects of asset efficiency, liquidity, and working capital turnover on financial performance have produced inconsistent findings. Therefore, this study aims to analyze the effect of asset efficiency, liquidity, and working capital turnover on the financial performance of manufacturing companies in the basic industry and chemical subsector listed on the Indonesia Stock Exchange during the 2021–2024 period. This study employed a quantitative research approach using secondary data obtained from the companies' annual financial statements. The population consisted of 89 manufacturing companies in the basic industry and chemical subsector listed on the Indonesia Stock Exchange during the 2021–2024 period. The sample was selected using a purposive sampling technique based on predetermined criteria, resulting in 47 companies with a total of 188 observations. After removing outlier data, the final dataset consisted of 171 observations. The data were analyzed using IBM SPSS Statistics Version 25 through descriptive statistical analysis, classical assumption tests, multiple linear regression analysis, partial significance tests (t-test), simultaneous significance test (F-test), and coefficient of determination test. The results indicate that asset efficiency and liquidity have a positive and significant effect on financial performance, while working capital turnover has no significant effect on financial performance. Furthermore, asset efficiency, liquidity, and working capital turnover simultaneously have a significant effect on financial performance. The Adjusted R Square value of 0.146 indicates that asset efficiency, liquidity, and working capital turnover explain 14.6% of the variation in financial performance, while the remaining 85.4% is explained by other factors outside the research model. Based on the findings of this study, it can be concluded that asset efficiency and liquidity significantly contribute to improving financial performance, whereas working capital turnover does not have a significant effect on financial performance. Therefore, effective asset management and adequate liquidity are essential factors in enhancing the financial performance of manufacturing companies in the basic industry and chemical subsector listed on the Indonesia Stock Exchange

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