Analysis of the Effect of Liquidity Ratios, Solvency and Activityon the Financial Performance of the Company (Literature ReviewofCorporate FinancialManagement)

Analysis of the Effect of Liquidity Ratios, Solvency and Activityon the Financial Performance of the Company (Literature ReviewofCorporate FinancialManagement)

CR,DER,InvTO,TATO

This article reviews the influence that aims to really know about liquidity ratios,slovability,andactivitiesthataffectthecompany'sfinancialperformance.Liquidityisproxied by current ratio (CR), solvability is proxied by debt to equity ratio (DER), activity isproxiedbyinventoryturnover(InvTO)andtotalassetturnover(TATO),whilethecompany's financial performance is proxied by return on equity (ROE).This article waswritten in order to determine the hypothesis of the influence between variables that can beused in subsequent research. The results of the library research are: 1) Current ratio (CR)separatelyaffectsreturnonequity(ROE);2)Debttoequityratio(DER)hasaseparateimpact on return on equity (ROE); 3) Inventory turn over (InvTO) has a separate effect onreturn on equity (ROE); 4) Total asset turn over (TATO) has a partial impact on return onequity(ROE);5)CR, DER,InvTO,TATO simultaneouslyhaveapositiveeffectonROE

JessicaMedelineEffendie1*,HennyA.Manafe2, StanisMan

https://dinastipub.org/DIJEFA/article/view/1507/1058

Widya Mandira Catholic University

13 December 2022

Jessica Medeline Effendie

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