The Influence of Leverage, Liquidity, Profitability, and Asset Structure on Financial Efficiency

(Empirical Study of Manufacturing Firms Listed on the Indonesia Stock Exchange (IDX) and Bursa Malaysia for the Period 2022–2024)

Abstract

This study aims to examine the effect of Leverage, Liquidity, Profitability, and Asset Structure on Financial Efficiency in manufacturing companies listed on the Indonesia Stock Exchange (IDX) and Bursa Malaysia for the period 2022–2024. Leverage is measured using Debt to Asset Ratio (DAR), Liquidity using Current Ratio (CR), Profitability using Return on Assets (ROA), and Asset Structure using Fixed Asset to Total Asset Ratio (FATA). This research is a quantitative study with samples of manufacturing companies selected using purposive sampling based on specific criteria. The analytical method used is multiple regression analysis with the help of SPSS version 25. The results show that leverage has a positive effect on financial efficiency, liquidity has a negative effect on financial efficiency, profitability has a positive effect on financial efficiency, while asset structure has a negative effect on financial efficiency. Simultaneously, leverage, liquidity, profitability, and asset structure significantly affect financial efficiency. The results of the difference test between Indonesia and Malaysia indicate that only profitability shows a significant difference, where manufacturing companies in Indonesia have higher profitability compared to Malaysia. Meanwhile, leverage, liquidity, and asset structure show no significant differences between the two countries.