ASSESSING FINANCIAL PERFORMANCE THROUGH LIQUIDITY, SOLVENCY, ACTIVITY, AND PROFITABILITY RATIOS: EVIDENCE FROM PT LCK GLOBAL KEDATON TBK (2017–2024)

Abstract

In this study, an evaluation of financial performance is conducted for the Indonesia-based company PT LCK Global Kedaton Tbk from 2017 to 2024 through financial ratio analysis. The financial ratio analysis is conducted to identify four important aspects: Liquidity Ratios, Solvency Ratios, Activity Ratios, and Profitability Ratios. The objectives of this research are to determine how well a company is capable of efficiently handling its financial resources and generating profits.

The study employs a quantitative descriptive technique and makes use of secondary data obtained through financial statements of the company. The techniques for trend analysis are used to examine changes in performance and make interpretations in line with financial management theories according to Kasmir (2019), Brigham & Houston (2018), and Gitman (2015).

The findings suggest that liquidity ratios, calculated through Current Ratio (CR), are in a constantly strong position that indicates the capability to fulfill current liabilities. Solvency position, measured through Debt to Equity Ratio (DER), has improved as there has been a decrease in dependence on debt. Activity ratio, calculated through Total Asset Turnover (TATO), keeps changing every year that reveals variability in efficiency. The ratio of profitability, calculated through Gross Profit Margin (CD-D), suggests that there is variability in maintaining cost and profitability.

Overall, it can be ascertained that the financial structure of PT LCK Global Kedaton Tbk is positive in relation to its liquidity and solvency management; however, it still needs to improve in operational and profit management. Cost efficiency and financial discipline are imperative in this regard.