THE ROLE OF FINANCIAL PERFORMANCE AS A MEDIATOR OF LIQUIDITY, SOLVENCY, AND STOCK PRICES IN THE CHEMICAL SECTOR OF THE IDX 2020-2024.
Keywords:
Liquidity, , Solvability, Stock PriceAbstract
This study examines the effect of liquidity and solvency on financial performance as measured by profitability, and its impact on stock prices of chemical sector companies during the period 2020-2024. Path analysis shows that solvency has a positive and significant effect on profitability with a path coefficient of 0.730 (t-statistic = 10.315; p = 0.000), confirming the importance of capital structure management in improving the company's financial performance. Conversely, liquidity has a negative but significant effect on profitability with a coefficient of -0.431 (t-statistic = 4.528; p = 0.000), indicating potential inefficiencies in managing current assets. Furthermore, the effect of profitability on stock prices is not significant with a coefficient of -0.172 (t-statistic = 1.200; p = 0.115), so the hypothesis of a positive effect of financial performance on stock prices is not supported. Therefore, the mediating role of profitability in the relationship between liquidity and stock prices and between solvency and stock prices is also not significant, confirming the complexity of the factors that influence stock prices in this sector. These findings indicate that stock price dynamics cannot be fully explained by internal financial indicators, but are also influenced by external factors and broader market conditions. This study makes an important contribution to financial management theory and practice and encourages further research to identify other critical factors that influence stock market value
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