The Relationship of Liquidity, Leverage, and Business Growth with Corporate Financial Stability
Year: 2024
Type: article
Abstract: The company's financial stability is a crucial aspect in ensuring the continuity of the company's operations and competitiveness. Liquidity, leverage, and business growth are factors that significantly affect a company's financial stability. This research aims to explore and identify how liquidity, leverage, and business growth affect a company's financial stability. By understanding these linkages, companies can formulate more effective strategies to maintain and improve their financial stability. This study uses a quantitative method with a multiple linear regression approach to analyze financial data from 100 companies listed on the Indonesia Stock Exchange during the 2019-2023 period. Data is collected through the company's financial statements that have been audited and processed using statistical software. The results show that liquidity has a significant positive influence on a company's financial stability, while leverage has a significant negative influence. Business growth has also been found to have a significant positive influence on the company's financial stability. These findings indicate that companies need to maintain a good balance between liquidity and leverage and encourage business growth to ensure sustainable financial stability.
Author: Muhammad Athaya
Institution: Islamic University of Indonesia
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W4409876151