The Effect of Financial Risk on Financial Performance in the Non-Cyclical Consumer Industry Listed on the BEI
Abstract
Financial performance refers to the assessment of a company's accomplishments concerning its overall health within a specific timeframe. This study aimed to investigate the impact of financial risk on the financial performance of non-cyclical consumer sector companies listed on the Indonesia Stock Exchange. The objective was to analyze how financial risk influences operational risk, market risk, liquidity risk, credit risk, solvency risk, and control variables, namely company size and leverage, on return on equity-a key metric for measuring financial performance. The study focused on the 52 non-cyclical consumer industry companies listed on the Indonesian Stock Exchange for the period spanning from 2018 to 2022. Employing a quantitative approach, the research utilized secondary data collected from audited annual reports. Panel data regression models were employed for testing purposes. The findings revealed that market risk and credit risk exerted a negative influence on financial performance, whereas liquidity risk, solvency risk, and operational risk demonstrated no significant impact on financial performance. The implications of this research provide financial managers with insights into optimizing financial performance to attain organizational objectives, particularly in enhancing shareholder welfare.
Downloads
Copyright (c) 2024 Dwi Wijayanty, Monic Indrianisca, Astrid Dila Aurelia, Laras Olivia, Farah Margaretha Leon
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
An author who publishes in the EKOMBIS REVIEW: Jurnal Ilmiah Ekonomi dan Bisnis agrees to the following terms:
Author retains the copyright and grants the journal the right of first publication of the work simultaneously licensed under the Creative Commons Attribution-ShareAlike 4.0 License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal
Submission of a manuscript implies that the submitted work has not been published before (except as part of a thesis or report, or abstract); that it is not under consideration for publication elsewhere; that its publication has been approved by all co-authors. If and when the manuscript is accepted for publication, the author(s) still hold the copyright and retain publishing rights without restrictions. For the new invention, authors are suggested to manage its patent before published. The license type is CC-BY-SA 4.0.
EKOMBIS REVIEW: Jurnal Ilmiah Ekonomi dan Bisnis is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
