Nur Anita* 

Faculty of Economics and Business, Universitas Negeri Semarang, Semarang

Muhammad Khafid

Faculty of Economics and Business, Universitas Negeri Semarang, Semarang

Niswah Baroroh

Faculty of Economics and Business, Universitas Negeri Semarang, Semarang 

DOI: https://doi.org/10.19184/bisma.v19i2.53763

ABSTRACT 

This study investigated the effect of leverage, profitability, and firm size on the liquidity of banking firms listed on the Indonesia Stock Exchange (IDX), with a focus on the moderating role of firm size. A quantitative approach was employed, and the population consisted of banking companies listed on the IDX from 2020 to 2024. Purposive sampling produced a sample of 235 analysis units. Data were collected using documentation techniques and analyzed using panel data regression and moderated regression analysis (MRA). The findings revealed that leverage had a significant negative effect on liquidity, supporting the principles of Commercial Loan Theory, which emphasized maintaining liquidity through short-term, self-liquidating assets. The results also showed that firm size significantly enhanced liquidity, while profitability had no significant direct effect. Furthermore, firm size positively moderated the relationship between leverage and liquidity, suggesting that larger banks were more resilient to the liquidity risks associated with high leverage. In contrast, firm size negatively moderated the relationship between profitability and liquidity, indicating that larger banks may have reinvested profits into long-term, less liquid assets. This study contributed to the financial management literature by revisiting the relevance of Commercial Loan Theory within the context of Indonesian banking institutions. Also, it addressed a gap in the literature, where previous studies had largely overlooked the moderating role of firm size in the relationship between financial structure and liquidity, particularly in emerging markets. By including firm size as a moderating variable, this research provided a deeper understanding of how internal characteristics influence liquidity risk. Additionally, the use of the quick ratio as a measure of liquidity introduced a more conservative and less commonly used metric in banking studies, offering a methodological contribution to the field. 

Keywords: Liquidity, Leverage, Size, Profitability, Commercial Loan Theory, Banking.