The impact of financial liquidity and leverage on financial performance: Evidence from property and real estate enterprises in Indonesia

Daryanto, W.; Samidi, S.; Siregar, D.

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Management Science Letters

ISSN 1923-9343 (Online) - ISSN 1923-9335 (Print) Quarterly Publication Volume 8 Issue 12 pp. 1345-1352 , 2018

The impact of financial liquidity and leverage on financial performance: Evidence from property and real estate enterprises in Indonesia Pages 1345-1352 Download PDF

Authors: Wiwiek Mardawiyah Daryanto, Sudarmawan Samidi, Dera Julianti Siregar

DOI: 10.5267/j.msl.2018.9.005

Keywords: Liquidity, Leverage, Financial performance, Property, Real estate

Abstract: The demand for property increases every year in line with the population growth in Indonesia. Moreover, the society believes that investing in the property will have future benefits since there is an expectation of an increase in strong middle-class consumer spending made to the residential business segment and also urban society demands for apartments and condominiums. Loans and mortgages are often made by both owners and developers in order to own the property. Therefore, this study investigates the impacts of financial liquidity and leverage on the financial performance of the Indonesian property and real estate enterprises. The study considers three (3) selected companies listed on Indonesia Stock Exchange LQ 45 (IDX LQ 45) over period five (5) years (2012- 2016). The secondary data are obtained from the financial statement (comprehensive income statement and statement of financial position) of selected property and real estate companies listed on IDX. This data is analyzed by using the regression analysis; the t-statistics and F significance ANOVA were used to test the hypothesis. The result of the analysis show that Current Ratio (CR) and Debt-Asset Ratio (DAR) had a negative relationship with Return on Assets (ROA) while Times Interest Earned (TIE) had a positive relationship with ROA in Indonesia property and real estate industry.

How to cite this paper

 Daryanto, W., Samidi, S & Siregar, D. (2018). The impact of financial liquidity and leverage on financial performance: Evidence from property and real estate enterprises in Indonesia.Management Science Letters , 8(12), 1345-1352.

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