Liquidity and Profitability in Indonesian Agribusiness Companies: The Moderating Roles of Firm Size and Capital Structure
DOI:
https://doi.org/10.61987/bamj.v4i3.2353Keywords:
Liquidity Management, Firm Profitability , Moderating Effect , Agribusiness SectorAbstract
This study examines how liquidity affects profitability in agribusiness firms and analyzes the moderating roles of firm size and capital structure. Agribusiness firms face unique challenges, including commodity price volatility, seasonal production cycles, and climate-related risks, making effective liquidity management essential to maintaining financial performance. This study used a quantitative approach with purposive sampling, including 45 agribusiness companies listed on the Indonesia Stock Exchange from 2015–2024, yielding 450 firm-year observations. The data were analyzed using Hayes PROCESS Macro Model 2 to simultaneously evaluate the moderating effects of firm size and capital structure within a regression framework. The findings indicate that liquidity has no significant direct effect on profitability (β = 0.0119, p = 0.0806). However, firm size significantly strengthens the liquidity-profitability relationship (β = 0.0069, p < 0.001), whereas capital structure does not significantly moderate it (β = −0.0019, p = 0.6963). These results imply that liquidity management should not focus solely on maintaining higher liquidity levels but rather on improving working capital efficiency and aligning financial strategies with firm capacity and operational conditions.
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