THE INFLUENCE OF CAPITAL ADEQUACY RATIO AND NON-PERFORMING LOAN ON PROFITABILITY OF COMMERCIAL BANKS LISTED ON THE INDONESIA STOCK EXCHANGE IN 2017-2019 | Zendy

Nathaniel Karel DJAYA | Zendy; Ika Yanuarti | Zendy

Open Access

THE 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,

Ika Yanuarti

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 , loan , non performing loan , working capital , return on capital employed , financial system , finance , economics , capital formation , incentive , financial capital , 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.

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