The Effect of Liquidity, Leverage and Total Aset Turnover on Profitability; Empirical Study of Manufacturing Companies in Indonesia Stock Exchange 2012 – 2017

International Journal of Economics and Management Studies

© 2019 by SSRG - IJEMS Journal

Volume 6 Issue 9

Year of Publication : 2019

Authors : Aang Munawar

10.14445/23939125/IJEMS-V6I9P116

How to Cite?

Aang Munawar, "The Effect of Liquidity, Leverage and Total Aset Turnover on Profitability; Empirical Study of Manufacturing Companies in Indonesia Stock Exchange 2012 – 2017," SSRG International Journal of Economics and Management Studies, vol. 6,  no. 9, pp. 126-131, 2019. Crossref, https://doi.org/10.14445/23939125/IJEMS-V6I9P116

Abstract:

This study to determine the effect of liquidity, leverage and total asset turnover on profitability. The research sample consisted of 18 companies through purpose sampling. Research data is taken from published financial statements. Panel data process using the EViews 6 application. Panel data analysis was carried out root test and regression model selection through chow test, Hausman test, and lagrange multiplier test. The results of the study show thatsimultaneously liquidity, leverage and total asset turnover have an influence on profitability of manufacturing companies. Partially liquidity, leverage and total asset turnover have a significant positive effect on profitability.The results of this study also have successfully identified that asset turnover is the dominant factor that affects on profitability and recommends that the Government in infrastructure development better prioritize the auction to listed companies in IDX.

Keywords:

liquidity, leverage, total asset turnover, profitability

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