THE IMPACT OF FINANCIAL RATIOS ON PROFIT GROWTH IN FOOD AND BEVERAGE MANUFACTURING COMPANIES LISTED ON THE INDONESIA STOCK EXCHANGE
DOI:
https://doi.org/10.46306/volatility.v1i2.165Keywords:
Profit Growth, Financial Ratios, Food and Beverage Industry, AutoRegressive Distributed Lag ModelAbstract
The food and beverage industry are a cornerstone of the global economy, providing essential products that meet basic human needs while significantly contributing to economic growth. In Indonesia, the food and beverage sub-sector plays a vital role in strengthening the national economy, generating employment, and boosting export earnings. This study examines the impact of the Current Ratio (CR), Return on Assets (ROA), and Debt to Equity Ratio (DER) on Profit Growth (PL) in manufacturing companies within the food and beverage sub-sector listed on the Indonesia Stock Exchange (IDX) from 2013 to 2023. Using secondary data, a quantitative approach was applied, employing the AutoRegressive Distributed Lag (ARDL) model to analyze the relationships between CR, ROA, DER, and PL. The results indicate that CR does not significantly affect PL in the short term but has a significant impact in the long term. ROA has a positive and significant effect on PL in the short term but is not significant in the long term. DER does not significantly affect PL in the short term but has a positive influence in the long term. These findings highlight that CR’s influence on PL becomes evident over time, ROA drives short-term profit growth, and DER’s impact emerges in the long run. Consequently, effective financial management strategies are crucial for sustaining profit growth in the food and beverage sector amid dynamic economic conditions
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