Liquidity dynamics and financial performance in Indonesia’s technology sector: Implications for capital market development
DOI:
https://doi.org/10.52300/grow.v12i1.26085Keywords:
capital market development, current ratio, financial performance, liquidity dynamics, technology sectorAbstract
Liquidity, as a fundamental aspect of corporate financial management, plays a crucial role in shaping firm performance and supporting capital market development, particularly in emerging technology sectors. This study investigates the dynamics of liquidity and its influence on financial performance among technology firms listed on the Indonesia Stock Exchange during 2022–2024. Drawing on firm-level financial data, we examine how liquidity, proxied by the current ratio, contributes to return on equity (ROE). The findings reveal that liquidity positively and significantly affects financial performance, while also highlighting its limited explanatory power relative to other determinants. These results underscore the complexity of financial performance dynamics and emphasize the importance of balanced liquidity management in enhancing market efficiency
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