EFFECT OF LIQUIDITY AND LEVERAGE ON PROFITABILITY IN AGRICULTURE SECTOR COMPANIES
Y.M. Hidayat, B.P. Gautama, C.S. Arianti

Universitas Pendidikan Indonesia

Abstract

The purpose of this study was to determine the effect of liquidity and leverage on company profitability. The research method used in this research is descriptive verificative method. The data used is secondary data, namely the type of data obtained indirectly from the first source (company) in the form of a summary of the companys performance for six years (2013-2018). The sampling technique used purposive sampling, obtained a sample of 14 companies. The data analysis conducted in this study used panel data regression. After the data was obtained, the classical assumption test was carried out (using the linearity, multicollinearity, heteroscedasticity, and autocorrelation test), Chows test, and Hausman test. The results of this study indicate that the picture of liquidity is in unfavorable condition, as well as leverage and profitability are in the unfavorable category, and profitability is not significantly affected by liquidity in a negative direction, while leverage has a significant negative effect on profitability.

Keywords: Liquidity, leverage and profitability

Topic: Financial Management and Accounting