The Influence of Financial Ratios on Financial Statement Disclosure: A Study of Indonesian Manufacturing Firms Listed on IDX (2020-2023)

Abstract

Purpose: The aim of this investigation is to assess the extent of financial statement disclosures by Indonesian companies regarding leverage, profitability, liquidity, and public share ownership. Additionally, it seeks to confirm the validity of the regression model utilized in the analysis.

Methodology: The results of this investigation are verified through the use of SPSS and secondary data obtained from the IDX website. Normality tests, descriptive statistics, heteroscedasticity, multicollinearity, autocorrelation, multiple linear regression, and feasibility tests of hypotheses and models are among them.

Findings: The study demonstrated that the regression model was valid and met basic assumptions, with independent variables (DER, Current Ratio, ROE, KSP) significantly influencing financial statement disclosures, explaining 95% of variations, and highlighting the importance of quality management and transparency.

Limitations: This study examined manufacturing companies listed on the Indonesian Stock Exchange from 2020 to 2023, employing purposive sampling and multiple regression analysis to investigate four financial variables. However, it did not explore complex relationships or other factors affecting financial disclosures.

Contribution: This study improves understanding of the variables that affect the disclosure of Indonesian companies' financial statements and emphasizes the importance of liquidity, public share ownership, and profitability. In addition, a valid regression model improves the analysis of relationships between variables.

Novelty: This study innovatively tests a reliable regression model for Indonesian manufacturing companies, revealing significant correlations between leverage, profitability, liquidity, and the ownership of publicly traded shares that disclose financial statements, while also highlighting the importance of multicollinearity.