The Role of Sales Growth in Moderating the Effect of Liquidity, Capital Structure, and Firm Size on Profitability in Indonesia
- DOI
- 10.2991/978-94-6239-811-5_36How to use a DOI?
- Keywords
- Capital Structure; Company Size; Liquidity; Profitability; Sales Growth
- Abstract
This study examines the role of sales growth in moderating the effect of liquidity, capital structure, and firm size on profitability in Indonesia. Liquidity is a metric employed to assess a firm’s capacity to fulfilll its short-term liabilities that have come due. Capital structure comprises a blend of liabilities and ownership equity. Company size is used to measure the magnitude of a corporation’s activities, reflected in total assets, sales, or market capitalisation, which indicate the organization’s capacity to execute its operational activities. Profitability serves as a metric to evaluate the efficacy of corporate executives in producing profit margins, encompassing firm earnings, the economic worth of sales, net assets, and equity. Liquidity and capital structure generally have a significant positive effect on profitability. Company size shows varying and inconsistent results on profitability. Several studies have shown that sales growth strengthens the effect of liquidity on profitability, as sales growth increases the efficiency of utilising assets and liabilities to produce earnings. Several studies have shown that sales growth does not temper the influence of company size on profitability, suggesting that the moderating effect is contingent upon industry circumstances and the timeframe of observation. Consequently, it may be inferred that liquidity, the structure of capital and the magnitude of the enterprise have a substantial impact on a company’s profitability, notwithstanding the disparate and conflicting research results.
- Copyright
- © 2026 The Author(s)
- Open Access
- Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.
Cite this article
TY - CONF AU - Ela Nurlaela PY - 2026 DA - 2026/10/29 TI - The Role of Sales Growth in Moderating the Effect of Liquidity, Capital Structure, and Firm Size on Profitability in Indonesia BT - Proceedings of the International Conference on Business, Economic, and Social Sustainability (ICOBES 2026) PB - Atlantis Press SP - 456 EP - 471 SN - 2352-5428 UR - https://doi.org/10.2991/978-94-6239-811-5_36 DO - 10.2991/978-94-6239-811-5_36 ID - Nurlaela2026 ER -