The Role of Company Size, Leverage Ratio, Activity Ratio and Liquidity Ratio To The Profitability of Manufacturing Companies on The Indonesia Stock Exchange in 2020 – 2024

Abstract

Profitability increased to some extent as the economy strove to sustain the industrial sector, and stakeholders were alleviated of fears surrounding the inability to further leverage their assets. Furthermore, the profitability of companies listed on the Indonesia Stock Exchange (IDX) was estimated for the 2020–2024 timeframe, taking internal factors into account. The study investigated the impact of management, leverage, activity, and profitability parameters on the industry over this period. The approach was built based on confirmed facts. A sample of 58 entities was picked via purposive sampling, resulting in a total of 290 observations. Data analysis was conducted using IBM SPSS Statistics 31, applying linear regression techniques. The data reveal that profit margins, leverage (DER), asset turnover (TATO), and the current ratio (CR) significantly influenced profitability (ROA). Specifically, whereas TATO and CR had favorable and substantial effects on ROA, other covariates showed negative and significant affects. The results reveal an R-squared value of 27.4%, indicating that 72.6% of the variance in profitability is attributed to factors other than the independent variables included in the model. Consequently, the study implies that organizations might boost their profitability by optimizing their capital structure and operational efficiency.