Leverage, Liquidity, and Firm Size on Financial Performance: Evidence from Indonesia's Property and Real Estate Sector, 2020–2024

Aji Setyawan; Axel Giovanni; Sofyan Ashari Nur

doi:10.30651/imp.v6i2.32216

Penulis

Aji Setyawan Universitas Tidar, Magelang, Indonesia
Axel Giovanni Universitas Tidar, Magelang, Indonesia https://orcid.org/0000-0001-9331-7899
Sofyan Ashari Nur Universitas Tidar, Magelang, Indonesia https://orcid.org/0009-0006-0116-1836

DOI:

https://doi.org/10.30651/imp.v6i2.32216

Kata Kunci:

Leverage, Liquidity, Firm Size, Financial Performance , Property Firms

Abstrak

Purpose: This study examines the effects of leverage, liquidity, and firm size on the financial performance of property and real estate firms listed on the Indonesia Stock Exchange (IDX) from 2020 to 2024, a period marked by the COVID-19 shock, tighter interest rates, and distress cases such as PT PP Properti Tbk

Design/Methodology: This quantitative causal associative study uses purposive sampling, resulting in 69 firms and 345 firm-year observations. Financial performance is measured by return on assets (ROA), leverage by the debt to equity ratio (DER), liquidity by the current ratio (CR), and firm size by the natural logarithm of total assets. The data come from audited financial statements and are analyzed with multiple linear regression (pooled OLS) using heteroskedasticity-consistent robust standard errors.

Findings: The research findings indicate that leverage has a negative and significant effect on ROA. Firm size has a positive and significant effect. Liquidity has no significant effect. The model is jointly significant, but the adjusted R² of shows that these firm-level ratios explain only a small share of the variation in profitability.

Practical Implications: The implication of this study is that corporate management needs to be more precise in optimizing long-term debt levels and large-scale asset management to maintain profitability

Originality/Value: This study offers recent evidence on the determinants of ROA among listed Indonesian property firms over a five-year panel that covers the pandemic and its aftermath. It shows that leverage and size matter for profitability while liquidity does not, and that firm-level ratios alone leave most of the variation unexplained, which points future research toward macroeconomic and non-financial factors.

JEL Classification: G32, L25, R30

SDG: SDG 8; SDG 11, SDG 9

Referensi

Budiadnyani, N. P., & Dewi, P. P. R. A. (2023). Leverage dan kinerja perusahaan dengan ukuran perusahaan sebagai variabel moderasi. Owner: Riset dan Jurnal Akuntansi, 7(4), 2874–2883. https://doi.org/10.33395/owner.v7i4.1684

Cahyana, A. M. K., & Suhendah, R. (2020). The influence of leverage, firm size, firm age and sales growth on financial performance. Jurnal Paradigma Akuntansi, 2(4), 1791–1798. https://doi.org/10.24912/jpa.v2i4.9375

Dalci, I. (2018). Impact of financial leverage on profitability of listed manufacturing firms in China. Pacific Accounting Review, 30(4), 410–432. https://doi.org/10.1108/PAR-01-2018-0008

Danso, A., Lartey, T. A., Gyimah, D., & Adu-Ameyaw, E. (2021). Leverage and performance: Do size and crisis matter? Managerial Finance, 47(5), 635–655. https://doi.org/10.1108/MF-10-2019-0522

Dirmansyah, N. O., Syalsabila, L., & Lestari, H. S. (2022). Pengaruh Likuiditas Terhadap Kinerja Perusahaan Pada Perusahaan Yang Terdaftar Di BEI, 27(1), 49–63. https://doi.org/10.24912/je.v27i1.854

Dwiastari, I. G. A. W., Darmawan, A., & Sugiastusti, R. H. (2024). Receivables turnover, leverage, company size and profitability: An empirical study on Indonesian financial companies. Profit: Jurnal Administrasi Bisnis, 18(1), 62–74. https://doi.org/10.21776/ub.profit.2024.018.01.5

Gujarati, D. N., & Porter, D. C. (2009). Basic econometrics (5th ed.). New York: McGraw-Hill/Irwin.

Gujarati, D. N., Porter, D. C., & Gunasekar, S. (2012). Basic econometrics. Chennai: McGraw-Hill Education (India).

Harsono, A., & Pamungkas, A. S. (2020). The influence of capital structure, liquidity and company size on company financial performance. Jurnal Manajerial dan Kewirausahaan, 2(4), 847–854. https://doi.org/10.24912/jmk.v2i4.9863

Haryono, E. (2024). Residential Property Price Survey Quarter I 2024: Residential property price increases continue. Bank Indonesia. https://www.bi.go.id/id/publikasi/laporan/Pages/SHPR__Tw_I_2024.aspx

Ibhagui, O. W., & Olokoyo, F. O. (2018). Leverage and firm performance: New evidence on the role of firm size. The North American Journal of Economics and Finance, 45, 57–82. https://doi.org/10.1016/j.najef.2018.02.002

Jensen, M. C., & Meckling, W. H. (2019). Theory of the firm: Managerial behavior, agency costs and ownership structure. In Corporate governance (pp. 77-132). Gower.

Krismiaji, K. (2017). Strategi bisnis, leverage keuangan dan kinerja perusahaan. Jurnal Akuntansi dan Auditing Indonesia, 21(1), 37–46. https://doi.org/10.20885/jaai.vol21.iss1.art4

Levine, D. M., Stephan, D. F., & Szabat, K. A. (2016). Statistics for managers using Microsoft Excel (8th ed.). Pearson.

Rahmatullah, D. (2025). Analysis of the effect of monetary policy on banking liquidity in Indonesia. PENG: Jurnal Ekonomi dan Manajemen, 2(3), 3302–3310. https://doi.org/10.62710/9wq2nd63

Samo, A. H., & Murad, H. (2019). Impact of liquidity and financial leverage on firm's profitability – An empirical analysis of the textile industry of Pakistan. Research Journal of Textile and Apparel, 23(4), 291–305. https://doi.org/10.1108/RJTA-09-2019-0044

Sudiyatno, B., & Suwarti, T. (2022). The role of liquidity in determining firm performance: An empirical study on manufacturing companies in Indonesia. European Journal of Business and Management Research, 7(6), 183–188. https://doi.org/10.24018/ejbmr.2022.7.6.1711

Wareza, M. (2020, 28 Oktober). Property business alert: Default, rating downgrade & bankruptcy! CNBC Indonesia. https://www.cnbcindonesia.com/

White, H. (1980). A heteroskedasticity-consistent covariance matrix estimator and a direct test for heteroskedasticity. Econometrica, 48(4), 817–838. https://doi.org/10.2307/1912934

Widjanarko, W. (2026). The effect of leverage on profitability: A dynamic panel study on the IDX. Jurnal Ilmiah Manajemen Kesatuan, 14(1). https://doi.org/10.37641/jimkes.v14i1.4815