Implementation of Financial Ratios: Evidence from the Indonesia Stock Exchange
Rizki Nurfian 
Management Study Program, Faculty of Economics and Business, University Muhammadiyah Purwokerto, Indonesia.
Ika Yustina Rahmawati *
Management Study Program, Faculty of Economics and Business, University Muhammadiyah Purwokerto, Indonesia.
Naelati Tubastuvi
Management Study Program, Faculty of Economics and Business, University Muhammadiyah Purwokerto, Indonesia.
Fatmah Bagis
Management Study Program, Faculty of Economics and Business, University Muhammadiyah Purwokerto, Indonesia.
*Author to whom correspondence should be addressed.
Abstract
Objective: Knowing the influence between capital structure, intellectual capital, and good corporate governance mechanisms on the company's financial performance.
Study Design: The population in this study consists of 87 primary consumer goods sector companies listed on the Indonesia Stock Exchange (IDX) for the period 2020-2022. Data from this study comes from the company's annual report.
Place and Duration of Study: Primary consumer goods sector companies listed on the Indonesia Stock Exchange for the period 2020-2022
Methodology: The method used in data collection is using purposive sampling techniques. For the sample used in this study, a total of 147 company data using multiple regression analysis, model fit test, and hypothesis test were tested using the Eviews 10 analysis tool.
Results: The results showed that intellectual capital variables and the board of commissioners affected profitability according to the hypothesis, while the capital structure variables, audit committee, and board of directors did not affect the profitability of the company which rejected the initial hypothesis.
Conclusion: This quantitative research assesses the impact of financial management, corporate governance, and intellectual capital utilization on the financial performance of primary consumer companies, utilizing numerical data to test hypotheses. Specifically, it evaluates the relationships between profitability, liquidity, solvency, board composition, audit committee structure, and value added efficiency of human and structural capital on company returns. The analysis intends to optimize financial ratio performance, governance mechanisms, and intellectual capital employment to improve firm profitability within the sector.
Keywords: Capital structure, intellectual capital, corporate governance, financial performance
How to Cite
Downloads
References
Putra RH, Tristiarto Y. Analysis of the determinants of the value of companies in the primary consumer goods sector on the Indonesian stock exchange. Analysis of the determinants of the value of the primary consumer goods sector on the Indonesian stock exchange. 2022;2(2): 348–356. DOI:10.29264/jakt.v19i2.10976.
Diana S, Sulistya E. Analysis of the Financial Performance of Indonesian Sharia Banking During the Covid-19 Pandemic. 2021;1(1): 111–125. DOI:10.32477/jrabi.vxix.xxx.
Aziz AA, Samrotun YC, Dewi RR. The influence of good corporate governance, intellectual capital, company size on financial performance in food companies. Econ. J. Econ. Bus. 2021;5(1):46. DOI:10.33087/ekonomis.v5i1.200.
Saragih AE, Sihombing UT. The influence of intellectual capital, good corporate governance, and company size on the financial performance of banking companies listed on the Indonesian stock exchange J. Ris. Accountant. Finance. 2021; 7(1):1–17. DOI:10.54367/jrak.v7i1.1133.
Yuliani E, Influence of Capital Structure. Liquidity and Sales Growth on Financial Performance," J. Ilmu Manaj. 2021; 10(2):111 DOI:10.32502/jimn.v10i2.3108.
Suryani AW, Nadhiroh A. intellectual capital and capital structure effect on firms’ financial performances. J. Account. Res. Organ. Econ. 2020;3(2):127–138. DOI:10.24815/jaroe.v3i2.17258.
Ritonga SA, Effendi I, Prayudi A. The Influence of Capital Structure on the Financial Performance of Consumer Goods Companies on the IDX. J. Ilm. Manaj. and Business. 2021; 2(2):86–95. DOI:10.31289/jimbi.v2i1.383.
8. Gani P. The Influence of Intellectual Capital on Financial Performance and Company Value (Study of Food and Beverage Companies Listed on the IDX). Owner. 2022;6(1):518–529. DOI:10.33395/owner.v6i1.613.
Febriany N. The influence of intellectual capital on company financial performance. J. Ilm Compartment. Accountant. 2020;17(1): 24–32. DOI:10.30595/kompartemen.v17i1.3971.
Yulandari LF, Gunawan H. The Influence of Intellectual Capital on Market Value and Financial Performance of Companies Listed on the Indonesian Stock Exchange. J. Appl. Manag. Accounts. 2019;3(1):36–50 DOI:10.30871/jama.v3i1.938.
Afridayani A, Mua'rif S. The Influence of Good Corporate Governance, Intellectual Capital, and Debt Policy on Financial Performance," Procur. J. Ilm. Manaj. 2022;10(1):14–24. DOI:10.35145/procuratio.v10i1.1958.
Reswari Saffira Putri, David Efendi. The Influence of Corporate Social Responsibility (Csr), Good Corporate Governance (GCG), and Company Size on Performance. J. Science and Ris. Accountant. 2022;11(6): 1–13.
Available: http://repository.unissula.ac.id/16945/
Dwijayanti E, Rinofah R, Sari PP. "The Influence of Intellectual Capital, CSR, and GCG on the Financial Performance of Manufacturing Companies Listed on the IDX for the 2015-2019 Period," Al-Kharaj J. Ekon. Finance. Sharia Business. 2021;4(2): 495–512. Doi:10.47467/alkharaj.v4i2.688.
Honi HY, Ivonne SS, Tulung JE. The Influence of Good Corporate Governance on the Financial Performance of Conventional Commercial Banks 2014-2018," J. EMBA J. Ris. Econ. Management, Business and Accounting Journal of Ris. Econ. Management, Business and Accounting. 2020;8(3):296–305.
Tri Diah Sari KHTSN, Kartika Henda Titisari, Siti Nurlaela. “novie_lucky,+ Journal+manager,+2_V4N1_SARI,” Upajiwa Dewantara. 2020;4(4):15–26. ISSN : 2614-0888.
Monica S, US Goddess. The Influence of Institutional Ownership and Independent Board of Commissioners on Financial Performance on the Indonesian Stock Exchange, INA-Rxiv. 2019;1–15.
Hartati N. The Influence of the Board of Commissioners, Audit Committee and Institutional Ownership on Company Financial Performance," EKOMABIS J. Ekon. Manaj. Business. 2020; 1(2):175–184. DOI:10.37366/ekomabis.v1i02.72.
Febrina V, Sri D. The Influence of the Board of Commissioners, Board of Directors, Audit Committee, and Managerial Ownership on Financial Performance. J. Inf. Accountant. 2022;1(1): 77–89.
Anaima N, Trisnaningsih S. The Influence of Internal Corporate Governance Mechanisms on Financial Performance, J. SIKAP (Information Systems, Finance, Audit and Taxation). 2021;6(1):28. DOI: 10.32897/jsikap.v6i1.596.
Yousef I, Almoumani H, Samara I. The Impact of Internationalization of the Boardroom on Capital Structure, J. Risk Financ. Manag. 2020;13(12). DOI:10.3390/jrfm13120307.
Wiagustini NLP, Ramantha IW, Panji Sedana IB, Rahyuda H. Indonesia’s capital structure: Pecking order theory or trade-off theory, Int. J. Appl. Bus. Econ. Res. 2017;15(16):119–131.
Nhang VA, Handoyo SE. The Influence of Capital Structure, GCG, and Company Size on the Financial Performance of Pharmaceutical Companies J. Managerial and Entrepreneurship. 2023;5(1): 66–75. DOI:10.24912/jmk.v5i1.22514.
Ayuningtya AH, Mawardi W. Analysis of the Effect of Capital Structure, Company Size, Tangibility, and Sales Growth on Company Financial Performance with Good Corporate Governance as a Moderating Variable," Diponegoro J. Manag. 2022l; 11(6):1–13,
Borrego A. Covariance structure analysis of health-related indicators for elderly people living at home with a focus on subjective sense of healthTitle. 2021;10(1): 6.
Ekawarti Y, Endarwati ET. Analysis of the Application of Resources Based View (RBV) in Society era 5.0 in Maintaining Company Business Competition, Feb. Untan.Ac.Id. 2022;1. Available:https://feb.untan.ac.id/wp-content/uploads/2023/02/3-1.pdf
Cahyani Prastuti M, Budiasih IGAN. "The Influence of Corporate Social Responsibility and Intellectual Capital on Financial Performance," E-Journal of Accountants. 2019;27:1365. DOI:10.24843/eja.2019.v27.i02.p20.
Wardifa IKS, Yanthi MD. Kontribusi Intellectual Capital on Financial Performance, Company Value and Share Prices. J. Akunt. Unesa. 2022;11(1):11–24. Available:https://journal.unesa.ac.id/index.php/akunesa/index
Wulandari B, Sianturi NG, Hasibuan NTE, Ginting ITA, Simanullang A. The Influence of Liquidity, Asset Management, Cash Turnover and Capital Structure on Financial Performance in Manufacturing Companies listed on the Indonesian Stock Exchange. Owner. 2020;4(1):176. DOI:10.33395/owner.v4i1.186.
Marashdeh Z, Saidat Z, Alkhodary D, Al-Haddad L. Agency Theory and the Jordanian Corporate Environment: why a Single Theory is not Enough,” Acad. Account. Financ. Stud. J. 2021;25(5):1–15.
Fitrianingsih D, Asfaro S. The Influence of Good Corporate Governance on the Financial Performance of Banking Companies on the Indonesian Stock Exchange. J. Revenue J. Ilm. Accountant. 2022;3(1):21–30.
DOI:10.46306/rev.v3i1.37.
CA's daughter. The Influence of the Audit Committee, Internal Audit, Independent Board of Commissioners on the Financial Performance of BUMN no. 2021; 2023.
Suryandani W. The influence of the audit committee, independent board of commissioners, institutional ownership and company size on financial performance (Case Study of Food and Beverage Companies Listed on the IDX in 2016-2020). J. Glob. Bus. Manag. Rev. 2022;4(1):109. DOI:10.37253/jgbmr.v4i1.6693.
Maridkha A, Himmati R. The influence of good corporate governance on the financial performance of banking companies for the 2017-2020 period," J. Account. Digit. Financ. 2021;1(3):195–205.
DOI:10.53088/jadfi.v1i3.208.
Sitanggang A. The Influence of the Independent Board of Commissioners, Audit Committee, Managerial Ownership and Institutional Ownership on Financial Performance (Empirical Study of Banking Companies Listed on the Indonesia Stock Exchange 2016-2018)," J. Ris. Accountant. Finance. 2021;7(2): 181–190. DOI:10.54367/jrak.v7i2.1401.
Nugrahani WP. "The influence of board gender, independent board of commissioners, audit committee and institutional ownership on company financial performance (Case Study of Bank Sub-Sector Companies Listed on the Indonesia Stock Exchange for the 2013-2017 Period)," J. Bisnis, Ekon. and Science. 2021;1(1):59–68.
Karlinda AE, Azizi P, Sopali MF. The influence of work experience, work performance, education and training on career development at PT. PLN (Persero) Padang Rayon Kuranji City,” J. Inf. Syst. Applied, Manag. Account. Res. 2021;5(2):523–531. DOI:10.52362/jisamar.v5i2.
Widyati, Maria F. The Influence of the Board of Directors, Independent Commissioners, Audit Committee, Managerial Ownership and Institutional Ownership on Financial Performance,” J. Ilmu Manaj. 1, no. 265–98:15–19.
Intia LC, Azizah SN. The Influence of the Board of Directors, Board of Independent Commissioners, and Sharia Supervisory Board on the Financial Performance of Sharia Banking in Indonesia J. Ris. Finance. and Accountant. 2021;7(2):46–59. DOI:10.25134/jrka.v7i2.4860.
Jao R, Randa F, Holly A, Gohari L. The Influence of Board of Directors Characteristics on the Financial Performance of Non-Financial Companies Listed on the Indonesian Stock Exchange. AkMen J. Ilm., 2021;18(2): 123–134. DOI:10.37476/akmen.v18i2.1427.
Daromes FE, Jao R. Dewan direksi terhadap reaksi investor mediation role of financial performance on the effect of, 2020;10(1):77–92.
Sari R. The Effect of Foreign Ownership and Leverage on Financial Performance. Balance. J. Accountant. And Business. 2020;5(1): 64. DOI:10.32502/jab.v5i1.2459.
Pulic A. Intellectual capital – does it create or destroy value? Meas. Bus. Excell. 2004;8(1):62–68 DOI:10.1108/13683040410524757.
DK NR. t-test descriptive statistics to make it easier to select data from concrete test results. J.Eng. Indonesia. 2022;3(1)1–9.
Khoerun Nisa S, Khairunnisa. The effect of capital structure, firm size, and investment decison on firm value (Study on Textile and Garment Sub Sectors Companies Listed in Indonesia Stock Exchange during 2015-2019),” E-Proceeding Manag. 2021; 8(5):5472–5480.
Indrasari A, Yuliandhari WS, Triyanto DN. The Influence of Independent Commissioners, Audit Committees, and Financial Distress on the Integrity of Financial Reports,” J. Akunt. 2017;20 (1):117. DOI:10.24912/ja.v20i1.79.