The Influence of Profitability, Liquidity, Capital Structure, and Company Size on the Financial Performance of Banking Companies Listed on the Indonesia Stock Exchange for the 2022–2025 Period

Abstract

This study aimed to evaluate the effects of profitability (Net Profit Margin/NPM), liquidity (Current Ratio/CR), capital structure (Debt-to-Equity Ratio/DER), and firm size (Ln Total Assets/Size) on financial performance, proxied by Return on Assets (ROA), among 30 banking companies listed on the Indonesia Stock Exchange during the 2022–2025 period. This study was motivated by data anomalies observed in the four banks with the largest asset values (BBCA, BBRI, BMRI, and BBNI), which experienced a 3.93% year-on-year decline in aggregate net profit during the January–November 2025 period. Although revenue generally increased, this condition indicated pressure on Net Profit Margin (NPM). At the same time, the ratio of liquid assets to third-party funds (LA/TPF) reached 25.78% in May 2024, exceeding the 10% threshold; however, this condition did not necessarily guarantee higher ROA. The research method employed a quantitative causal-associative approach using purposive sampling, consisting of 120 observations from 30 banks over four years, and multiple linear regression analysis of panel data using the Ordinary Least Squares (OLS) method. The F-test results indicated that all four variables simultaneously had a significant effect on ROA. Partially, NPM had a positive and significant effect, CR had a negative and significant effect, DER had a negative and significant effect, while firm size had no significant effect. The results of this study are expected to serve as a reference for bank management, regulators, and investors in optimizing financial performance amid high interest rates and tight liquidity conditions.