Analyzing the Return on Equity and Return on Assets to Evaluate Profit Growth at PT. Indofood Sukses Makmur Tbk. for the Period of 2016-2020

The research aims to analyze the financial performance of PT. Indofood Sukses Makmur Tbk. by using financial ratios. The study employed a quantitative research method and collected data from the company's financial statements from 2016 to 2020. The liquidity ratios of the company during this period were found to be in a fairly good condition. Both the current ratio and quick ratio were good, indicating that the company has sufficient current assets to cover its current liabilities. However, the cash ratio was not in good condition, which means the company has limited cash available to pay off its current liabilities. On the other hand, the working capital to total asset ratio was in a poor condition, which suggests that the company has minimal working capital in its assets. The solvency of the company from 2016 to 2020 was fairly good, as it had collateral to cover its long-term debts. However, the activity ratios of PT. Indofood Sukses Makmur Tbk. were in a poor condition due to the inefficient turnover of accounts receivable. This resulted in longer time periods required for collecting accounts receivable and increasing sales. Despite the poor activity ratios, the profitability ratios of the company were in a fairly good condition as it was able to generate a net profit from its investments. Overall, the study suggests that PT. Indofood Sukses Makmur Tbk. has a mixed financial performance during the period of 2016 to 2020, with some ratios indicating good financial health and others indicating areas for Improvement.