The Effect of Capital Structure, Agency Costs, and Liquidity on Financial Performance (Manufacturing Companies Listed on the Indonesia Stock Exchange)

Financial performance represents a company’s capability as shown in its financial statements, which stakeholders use as a basis for decision-making. This study aims to analyze the impact of capital structure, agency costs, and liquidity on the financial performance of manufacturing companies listed on the Indonesia Stock Exchange (IDX) during the 2019-2023 period. The study employs several variables, including capital structure, which is measured using the debt-to-equity ratio (DER), liquidity measured by the current ratio (CR), agency costs measured by the balance of power (BOP), and financial performance measured by return on assets (ROA). The population of this study consists of all consumers non-cyclicals companies listed on the IDX, totaling 129 companies. The selected sample comprises 78 companies that have complete financial reports over the five-year period from 2019-2023, selected using the purposive sampling method and analyzed using multiple regression analysis. The results of this study show that DER has a negative effect on ROA, BOP has a negative effect on ROA, and CR has no significant effect on ROA.