The effect of net profit margin, return on investment, and current ratio toward financial performance in health sector companies listed of Indonesia stock exchange for 2021–2024 period
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Abstract
This study aims to examine and analyze the influence of Net Profit Margin, Return on Investment, and Current Ratio on the financial performance of health sector companies listed on the Indonesia Stock Exchange (IDX) during the 2021–2024 period. Financial performance in this study is proxied by Return on Assets (ROA). The research population consists of 35 companies in the health sector, with a sample of 10 companies over 4 years, resulting in 40 data points. The research was conducted from April to June 2025. This study uses a quantitative approach with multiple linear regression analysis processed using SPSS version 23. The results show that Net Profit Margin, Return on Investment, and Current Ratio have a positive effect on financial performance (ROA). These findings support Signaling Theory, which explains that strong financial ratios such as high profitability and liquidity send positive signals to investors regarding the company's condition and prospects. Therefore, it is recommended to improve operational efficiency, manage investments optimally, and maintain liquidity to achieve stable and sustainable financial performance.
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How to Cite
Farina, S. G., & Sunarmi, S. (2025). The effect of net profit margin, return on investment, and current ratio toward financial performance in health sector companies listed of Indonesia stock exchange for 2021–2024 period. Indonesia Accounting Research Journal, 13(1), 37–45. https://doi.org/10.35335/iacrj.v13i1.503
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Ghozali, I. (2019). Applications of multivariate analysis with IBM SPSS 23 (8th Edition). 8th Printing. Semarang: Diponegoro University Publishing Agency. 14(1), 15–31.
Gunawan, R., Widiyanti, M., Malinda, S., & Adam, M. (2022). the Effect of Current Ratio, Total Asset Turnover, Debt To Asset Ratio, and Debt To Equity Ratio on Return on Assets in Plantation Sub-Sector Companies Listed on the Indonesia Stock Exchange. International Journal of Economic, Business, Accounting, Agriculture Management and Sharia Administration (IJEBAS), 2(1), 19–28. https://doi.org/10.54443/ijebas.v2i1.139
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Octavera, S., & Syafel, A. (2022). Financial Distress Prediction Accuracy Analysis. Dharma Andalas Journal of Economics and Business, 24(1), 194–204. https://doi.org/10.47233/jebd.v24i1.363
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Tasmil, L. J. (2019). Effect of Sales Growth, Current Ratio, Debt to Equity Ratio on Financial Performance of PT Sirma Pratama Nusa. Journal of Islamic Economics & Economics, 2(2), 131–139. https://doi.org/10.36778/jesya.v2i2.62
Teng, S. H., Sitohang, P. R., Feronika, P. C., & Oktavia, R. (2022). The Effect of NPM, ROA, DER and Size on Financial Performance in the Real Estate and Property Sector listed on the IDX for the 2018-2020 Period. 6(April), 1426–1437.
Arif, S., Novita, L., Novitasari, D., Ananda, B. R., Studi, P., Manajemen, M., Sarjana, P., & Pamulang, U. (2023). Analysis of Return On Investment (ROI) to Assess Financial Performance at PT. Kitach Karya Cipta. 2(1), 45–57.
Astonugroho, R., & Rosa, T. (2023). Analysis of the Effect of Return of Investment (ROI) on the Financial Performance of a Company. Journal of Accounting, Management, Economics, and Business (Analysis), 1(1), 52–60.
Desyi Erawati, Elloni Shenurti, S. N. K. (2022). (2022). Analysis of Return on Asset (ROA), Return on Equity (ROE) and Corporate Social Responsibility (CSR) that affect Firm Value in Manufacturing Companies. 1(0), 1–10.
Ghozali, I. (2019). Applications of multivariate analysis with IBM SPSS 23 (8th Edition). 8th Printing. Semarang: Diponegoro University Publishing Agency. 14(1), 15–31.
Gunawan, R., Widiyanti, M., Malinda, S., & Adam, M. (2022). the Effect of Current Ratio, Total Asset Turnover, Debt To Asset Ratio, and Debt To Equity Ratio on Return on Assets in Plantation Sub-Sector Companies Listed on the Indonesia Stock Exchange. International Journal of Economic, Business, Accounting, Agriculture Management and Sharia Administration (IJEBAS), 2(1), 19–28. https://doi.org/10.54443/ijebas.v2i1.139
Hardani, Auliya, N.H., Andriani, H., Fardani, R.A., Ustiawaty, J., Utami, F.E., et al. (2020). Quantitative and Qualitative Research Methods.Yogyakarta: Science Library Publisher. 6(4), 1–8.
Ina Amalia, Puji Astuti, F. (2024). Influence Of Current Ratio, Cash Ratio, Debt To Equity Ratio And Net Profit Margin On Financial Performance Of Health Sector Companies On The IDX Ina. 10(2), 205–218.
Kasmir. (2019). Financial Statement Analysis.Jakarta: PT.Raja Grafindo Persada. 9(6), 1–18.
Lestari D, & Rahmah A. (2022). The Impact of Covid-19 on Financial Performance and Stock Prices of Pharmaceutical Companies Listed on the Indonesia Stock Exchange (IDX). Borneo Student Research, 4(1), 271–278.
Masdiantini, P. R., & Warasniasih, N. M. S. (2020). Financial Statements and Company Bankruptcy Predictions. Scientific Journal of Accounting, 5(1), 196. https://doi.org/10.23887/jia.v5i1.25119
Mitta Viriyanti, & Vicky Dzaky Cahaya Putra. (2025). The Effect of Return On Investment, Activity Ratio, and Company Size on Financial Performance: Case Study on the Textile Industry Sector Listed on the Indonesia Stock Exchange for the 2019-2023 Period. Al-Kharaj: Journal of Islamic Economics, Finance & Business, 7(4), 1789–1805. https://doi.org/10.47467/alkharaj.v7i4.6897
Mulatsih, L. S., Purnomo, H., Prabantarikso, M., Dhamayanti, S. K., & Sunarmi, S. (2024). Analysis of The Influence of Digital Banking, Bopo and NPF on Profitability Levels of Sharia Commercial Bank. Sentralisasi, 13(1), 215–226. https://doi.org/10.33506/sl.v13i1.3101
Mulyana, Elis Badariah, Imat Hikmat, F. H. (2023). The Effect of Net Profit Margin (Npm), Total Asset Turnover (Tato) and Current Ratio (Cr) on Return on Assets (Roa) of Telecommunication Sub-Sector Companies Listed on the Indonesia Stock Exchange for the 2016-2020 Period. Indonesian of Interdiscplinary Journal, 5(3), 274–290.
Octavera, S., & Syafel, A. (2022). Financial Distress Prediction Accuracy Analysis. Dharma Andalas Journal of Economics and Business, 24(1), 194–204. https://doi.org/10.47233/jebd.v24i1.363
Onoyi, N. J., & Windayati, D. T. (2021). The Effect of Company Size, Good Corporate Governance and Operating Efficiency on Financial Performance. Financial Zone, 11(1), 15–28.
Rizkyanti, M., Herlinawati, E., & Suryaningprang, A. (2024). The Influence of Financial Ratios on The Return on Assets in Multinational Companies. 13(Desember 2023), 143–154.
Shofwatun, H., Kosasih, K., & Megawati, L. (2021). Financial Performance Analysis Based on Liquidity Ratios and Profitability Ratios at PT Pos Indonesia (Persero). KRISNA: Kumpulan Riset Akuntansi, 13(1), 59–74. https://doi.org/10.22225/kr.13.1.2021.59-74
Sugiyono. (2020). Quantitative, Qualitative, and R&D Research Methods. Bandung: Alfabeta. 1(10), 1–208.
Sukesti, F., Ghozali, I., Fuad, F., Almasyhari, A. K., & Nurcahyono, N. (2021). Factors Affecting the Stock Price : The Role of Firm Performance. 8(2), 165–173. https://doi.org/10.13106/jafeb.2021.vol8.no2.0165
Tasmil, L. J. (2019). Effect of Sales Growth, Current Ratio, Debt to Equity Ratio on Financial Performance of PT Sirma Pratama Nusa. Journal of Islamic Economics & Economics, 2(2), 131–139. https://doi.org/10.36778/jesya.v2i2.62
Teng, S. H., Sitohang, P. R., Feronika, P. C., & Oktavia, R. (2022). The Effect of NPM, ROA, DER and Size on Financial Performance in the Real Estate and Property Sector listed on the IDX for the 2018-2020 Period. 6(April), 1426–1437.
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