Open AccessTHE INFLUENCE OF CAPITAL ADEQUACY RATIO AND NON-PERFORMING LOAN ON PROFITABILITY OF COMMERCIAL BANKS LISTED ON THE INDONESIA STOCK EXCHANGE IN 2017-2019
Author(s) -
Nathaniel Karel DJAYA,
AUTHOR_ID,
Ika Yanuarti,
AUTHOR_ID
Publication year - 2021
Publication title -
business excellence and management
Language(s) - English
Resource type - Journals
eISSN - 2668-9219
pISSN - 2248-1354
DOI - 10.24818/beman/2021.11.4-06
Subject(s) - return on assets , capital adequacy ratio , profitability index , business , stock exchange , non performing loan , loan , working capital , return on capital employed , risk adjusted return on capital , finance , financial system , economics , capital formation , financial capital , incentive , profit (economics) , microeconomics
This study has the purpose to analyze the influence of Capital Adequacy Ratio and Non-Performing Loan on profitability of Commercial Banks. The sample of this study consists of 26 Commercial Banks listed on the Indonesia Stock Exchange in 2017-2019. This research used Multiple Regression Analysis to analyze the data gathered from audited financial reports of those banks. The results showed that the Capital Adequacy Ratio and Non-Performing Loan simultaneously affect the Profitability, which means that if there is an increase in Capital Adequacy Ratio and Non-Performing Loan, then it will be followed by an increase in Return on Assets. However, if it`s tested partially then it is only Non-Performing Loans that affect the Return on Assets. The influence was negative and statistically significant. The Capital Adequacy Ratio had positive influence on Return on Assets but not statistically significant.