Financial Ratios and Corporate Governance's Impact on Financial Performance in the Indonesian Stock Market: The Case in Manufacturing Industry

Abstract

Aims: Here to determine how financial ratios in this case, liquidity and leverage ratios along with an examination of corporate governance in this case, institutional and management ownership affect the company's financial performance. Study Design: The population of the study consists of 194 manufacturing-related companies listed on the Indonesia Stock Exchange (IDX) for the 2019–2021 period. The data for this study came from the company's annual report. Methodology: The method used to gather the data was purposeful sampling. For this inquiry, 36 businesses served as samples. The conventional assumption test, multiple regression analysis, model fit test, and hypothesis testing are tested using the analytical tool Eviews 12. Results: Given that managerial ownership, institutional ownership, and liquidity ratios are the variables affecting the company's financial performance, the analysis' findings show that only one hypothesis—the impact of the leverage ratio on the company's financial performance—is supported, whereas H2, H3, and H4 are not.