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The Effect of Leverage, Liquidity, and Profitability on Return on Assets (ROA) at Company X

Year: 2025

Type: article

Abstract: This study examines the effect of leverage, liquidity, and profitability on Return on Assets (ROA) at Company X using a quantitative research design. Data were collected from 130 samples, analyzed using a Likert scale (1-5), and processed with Structural Equation Modeling-Partial Least Squares (SEM-PLS) 3. The findings reveal that all three variables—leverage, liquidity, and profitability—positively and significantly impact ROA. Liquidity demonstrates the strongest influence, followed by profitability and leverage. The results underscore the importance of liquidity management, operational efficiency, and optimal leverage utilization in enhancing financial performance. These insights provide practical implications for improving the financial strategies of organizations in similar industries.

Source: West Science Business and Management

DOI: 10.58812/wsbm.v3i01.1771

Authors: Faisal Umardani Hasibuan, Toto Ramadhan

Institutions: Institut Agama Islam Negeri Langsa, Universitas Pasundan

Language: English

Topic: Financial Analysis and Corporate Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: diamond

OpenAlex ID: W4409315565

FWCI: 5.501

Cites:

Cited by: 2

Related to: 10