Debt Policy, Liquidity Policy, and Profitability: A Proof from the Agricultural Companies in Indonesia

Profits describe managers' performance in front of the company stakeholders, especially shareholders, suppliers, and creditors. Therefore, they must organize the financial resources well by taking exceptional policies. This research aims to know manager behavior to utilize debt and liquidity policies to create profits by examining their effect on profitability in the agricultural companies listed on the Indonesian capital market between 2014 and 2020 as the population and samples. Because of their homogeneous feature and the variables-related data, this study applies the simple random sampling method and the t-test for the coefficients in the regression model to prove each relationship. By Denoting these statistical testing results and their discussion, this study infers a negative relationship between debt policy and profitability. Conversely, the liquidity policy is positively associated with profitability. Therefore, we suggest managers use less debt and excess current assets, significantly cash, to enhance profits.