THE INFLUENCE OF PROFITABILITY AND LIQUIDITY ON THE FINANCIAL PERFORMANCE OF FOOD AND BEVERAGE COMPANIES

Abstract

This research was conducted to determine the independent variable profitability as measured by (NPM) and liquidity as measured by (CR) on the dependent variable of company financial performance as measured by (ROE). This research uses as objects food and beverage companies that have been listed on the Indonesia Stock Exchange from 2020 to 2023 or for 4 years. In this research, purposive sampling technique was used. Based on the criteria that have been determined, there are 10 companies used in this research. This research data analysis uses multiple linear analysis and is processed using the SPSS version 27 application. The results of this research show that profitability (NPM) has a positive effect on the company's financial performance. This shows that a company that is able to generate high profits means the company has large internal funds so that the company's activity and operational level will reach its maximum. Liquidity (CR) has a negative effect on the company's financial performance. This shows that a high level of liquidity reflects the company's ability to fulfill short-term debt obligations which can reduce the financial performance used in the company.