IMPACT OF LIKUIDITAS AND SOLVABILITY ON PROFITABILITY AT PT MALINDO FEEDMILL TBK FOR THE YEARS 2015–2024

Abstract

The purpose of this study is to examine the effects of liquidity and solvency on the profitability of PT Malindo Feedmill Tbk in the period of 2015–2024. This research was conducted with a quantitative descriptive approach on the basis of secondary data from the annual financial statements of the company available on the Indonesia stock exchange. Quantitatively, this research measures liquidity using Current Ratio, Quick Ratio and Cash Ratio, and solvency using Debt to Equity Ratio and Debt to Asset Ratio. Subsequently, gross profit margin, net profit margin, return on assets, return on equity, and operating profit margin represent profitability as the dependent variable. The data was processed by Microsoft Excel with descriptive and linear regression analysis to ascertain the relationship and influence among the research variables. The results of the study showed that liquidity of PT Malindo Feedmill Tbk during the study period fluctuated, meaning that company is generally able to meet short-term obligations in addition to having some inconsistencies. It is indicated that solvency ratios have a high dependence on debt financing, although the condition occurs at the standard level. Profitability ratio also fluctuates during the study period, implying different efficiency of operation and cost management at some years to another. In conclusion, these findings show that liquidity and solvency have a significant effect on profitability. Hence, sustaining a balance of liquidity and effective leverage is necessary to promote financial performance and ensure future profitability.