Analysis of the Effect of Profitability, Liquidity and Capital Structure on Investment Risk in Primary Consumer Goods Industry (Non-Cyclicals) Companies Listed on The IDX in 2018-2020

Abstract

In 2022, Indonesia was rife with cases of investment fraud. SWI (Investment Alert Task Force) revealed that three main factors made many people entangled in illegal investments: the nature of wanting to get rich suddenly, recklessness, and lack of public financial literacy. Hence, awareness of the potential for fraud was still minimal. The purpose of this study was to analyze the effect of profitability, liquidity, and capital structure on investment risk. This research was conducted by analyzing report data from non- cyclical consumer goods industry companies listed on the IDX for 2018-2020 and observational data obtained from 105 companies. The sampling method used in this research is a non-probability sampling method with a purposive sampling technique. This research is quantitative research with multiple linear regression analysis methods. The results of this study indicate that profitability and capital structure have an effect on investment risk, while liquidity has no effect on investment risk.