An Empirical Study of Quick Ratio and Profitability on Manufacturing Firms in Indonesia
Society Volume 10 Issue 2#2022
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Keywords

Indonesia;
Manufacturing Firms;
Net Profit Margin;
Profitability;
Quick Ratio;
Return on Assets;
Return on Equity

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Pandeirot, L., Sumanti, E., & Aseng, A. (2022). An Empirical Study of Quick Ratio and Profitability on Manufacturing Firms in Indonesia. Society, 10(2), 525-533. https://doi.org/10.33019/society.v10i2.470

Abstract

This study intended to test the effect of the quick ratio on manufacturing firms’ profitability in Indonesia. To measure the profitability, three dependent variables were used: Net Profit Margin (NPM), Return On Assets (ROA) and Return On Equity (ROE). Several variable controls were used: firm size, variability in net operating income, sales growth, gross domestic product growth, and leverage. A total of 158 manufacturing firms with published financial statements from 2012 to 2016 were analyzed using a regression method. It is found that quick ratio has positive effects on manufacturing firms’ NPM and ROA. However, the same effect is not found on ROE.

DOI : https://doi.org/10.33019/society.v10i2.470
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