The Effect of Liquidity, Liquid Assets, and Non-Performing Loans on Financial Performance with Cost Efficiency As A Moderation Variable Banking Listed on The Indonesia Stock Exchange

masno Marjohan marjohan

Abstract


Objectives: This investigation aimed to ascertain the influence of Liquidity, Capital Adequacy, and Non-Performing Loans on Financial Performance while considering the moderating role of Cost Efficiency. 

Methodology: This study utilizes secondary data collected through purposive sampling. 100 samples were selected based on specific criteria over 5 time periods using the EViews testing tool. The data was analyzed using Panel Data Regression with Moderating Regression Analysis. 

Finding: Liquidity and capital adequacy positively impact financial performance, while non-performing loans have no significant effect. Cost efficiency strengthens the positive effects of liquidity and capital adequacy but not of non-performing loans.

Conclusion: Enhancing financial performance is crucial for any organization, and liquidity and capital adequacy play a vital role in achieving this goal. These factors have been proven to have a favorable impact on the overall financial health of a company. Conversely, non-performing loans appear to have a negligible impact on financial performance. However, cost efficiency can further strengthen the positive effects of liquidity and capital adequacy, but it does not have the same impact on non-performing loans. Hence, focusing on maintaining high levels of liquidity and capital adequacy, along with improving cost efficiency, can greatly contribute to enhancing financial performance.


Keywords


liquidity; capital adequacy; non-performing loans; cost efficiency.

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References


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DOI: http://dx.doi.org/10.22441/jurnal_mix.2024.v14i3.006

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