HERSUGONDO, Hersugondo (2026) " ARTIKEL Dr. HERSUGONDO, SE, MM: Financial Ratios and Their Impact on Equity and Stock Performance in Non Cyclical Consumer Firms ". QUALITY Access to Success, 27 (213). pp. 379-393.

Text (Artikel) Financial Ratios and Their Impact on Equity and Stock Performance in NonCyclical Consumer Firms.pdf Download (870kB)

Abstract

While extensive research has examined financial ratios in mature markets, few studies have investigated how these
ratios simultaneously influence profitability and stock performance in Indonesia’s Consumer Non‑Cyclicals sector,
especially amid recent macro‑economic turbulence. The Consumer Non‑Cyclicals sector in Indonesia
encompassing basic necessities such as food and medicine is a critical industry characterized by high stability
during economic fluctuations. Nevertheless, global and domestic challenges compel companies in this sector to
enhance efficiency and financial stability. This study analyzes the impact of three financial ratios Debt‑to‑Equity
Ratio (DER), Current Ratio (CR), and Total Assets Turnover (TATO) on Return on Equity (ROE) and Stock Return
(RS) using a quantitative path‑analysis approach applied to data from Consumer Non‑Cyclicals firms covering
2015–2023. The findings reveal that DER and CR exert significant negative effects on ROE, whereas TATO
positively influences RS. Moreover, ROE mediates the relationship between DER and RS. The results underscore
the importance of efficient capital‑structure management, optimal liquidity, and productive asset utilization for
improving financial performance. Accordingly, firms are advised to focus on operational efficiency and robust capital
management to boost competitiveness and attract investors, while investors can leverage these insights for
investment evaluation. This study is limited to a single sector in Indonesia; future research should extend the
analysis to other sectors or countries to obtain broader insights.

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