Liquidity, Capital Structure, and Asset Utilisation as Determinants of Profitability: Evidence from Food and Beverage Sub-Sector Firms Listed on the Indonesia Stock Exchange (2021–2024)

Syarifah Fadhila Meutya () and Hadi Suriono ()
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Syarifah Fadhila Meutya: Universitas Asahan
Hadi Suriono: Universitas Asahan

Priviet Social Sciences Journal, 2026, vol. 6, issue 5, 373-390

Abstract: This study examines the partial and joint association between three fundamental financial ratios — liquidity (Current Ratio, CR), capital structure (Debt-to-Equity Ratio, DER), and asset utilisation (Total Assets Turnover, TATO) — and profitability (Return on Assets, ROA) in food and beverage (F&B) sub-sector firms listed on the Indonesia Stock Exchange (IDX) over the post-pandemic period of 2021–2024. The study draws on trade-off theory, pecking-order theory, and the resource-based view of asset productivity. A purposive sampling procedure produced an initially balanced short panel of 17 firms over four fiscal years (n = 68 firm-year observations) after exclusion of firms that did not satisfy the continuous-listing criterion throughout 2021–2024. To address heavy-tailed financial-ratio distributions, the baseline pooled multiple regression is supplemented by a sensitivity analysis on a residual-trimmed subset (n = 32) and by firm fixed-effects estimation. Diagnostic tests (Kolmogorov-Smirnov for normality, VIF for multicollinearity, Glejser test for heteroscedasticity, Durbin-Watson for autocorrelation) are reported transparently. Results on the trimmed analytical sample indicate that, partially, CR is not significantly associated with ROA (β = 0.224, t = 1.37, p = 0.182), DER is positively and significantly associated with ROA (β = 0.759, t = 5.29, p

Keywords: current ratio; debt-to-equity ratio; total assets turnover; return on assets; food and beverage; Indonesia Stock Exchange; trade-off theory (search for similar items in EconPapers)
Date: 2026
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DOI: 10.55942/pssj.v6i5.1924

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