FINANCIAL PERFORMANCE OF CAPITAL-INTENSIVE FIRMS AMID AUTOMOTIVE INDUSTRY DYNAMICS: EXAMINING THE ROLES OF CAPITAL STRUCTURE, LIQUIDITY AND FIRM SIZE

Abstract

This research investigates how capital structure, liquidity, and firm size influence the financial performance of capital-intensive manufacturers operating in Indonesia’s automotive and components subsector, drawing on data from companies listed on the Indonesia Stock Exchange (IDX) between 2021 and 2024. A quantitative, descriptive-associative design was applied. Out of 18 firms in the population, purposive sampling yielded a final sample of 8 firms, producing 32 firm-year observations. Annual financial reports served as the secondary data source, processed through descriptive statistics, classical assumption testing, multiple linear regression, partial t-tests, simultaneous F-tests, and the coefficient of determination using SPSS software. Findings reveal that capital structure exerts a significant influence on financial performance, while liquidity and firm size individually show no significant partial impact. When tested together, however, the three variables jointly affect financial performance. The results suggest that prudent management of capital structure is essential for boosting profitability, whereas elevated liquidity levels and a larger asset base alone do not guarantee stronger financial outcomes unless paired with efficient management of assets and resources. The study concludes that sound financing strategies remain central to strengthening the financial performance of capital-intensive manufacturers, offering practical insight for company management, investors, and future researchers alike.