The The influence of CR, TATO, and DAR on ROA in sharia infrastructure securities companies

Abstract

This study aims to analyze the influence of financial ratios, specifically the Current Ratio (CR), Total Asset Turnover (TATO), and Debt to Asset Ratio (DAR), on Return on Assets (ROA) in companies, to determine whether different data, time periods, and research objects yield consistent or differing results from prior studies. The primary motivation behind this research is the importance of financial performance evaluation in investment decision-making, where investors rely on financial ratios such as liquidity, activity, solvency, and profitability to assess a company's condition. This study adopts a quantitative research design with a descriptive and verification approach and utilizes multiple regression analysis to test the relationships among variables. The findings indicate that partially, CR does not have a significant effect on ROA, while both TATO and DAR show a significant impact on ROA. Furthermore, the analysis reveals that CR, TATO, and DAR simultaneously influence ROA with a contribution of 77%, suggesting a strong combined effect of the three ratios on profitability. These results support the notion that activity and solvency ratios may serve as more reliable indicators of profitability than liquidity ratios in the context of this research sample. Overall, the study contributes to financial management literature by highlighting the varying influence of financial ratios on profitability across different conditions and can serve as a reference for investors and managers in making informed financial decisions.