Open AccessFINANCIAL PERFORMANCE ANALYSIS OF RURAL BANKS IN MANOKWARI: A CASE STUDY OF ARFAK INDONESIA RURAL BANK
Author(s) -
Rully Novie Wurarah,
Mona Permatasari Mokodompit
Publication year - 2020
Publication title -
journal of applied business administration
Language(s) - English
Resource type - Journals
ISSN - 2548-9909
DOI - 10.30871/jaba.v4i2.2142
Subject(s) - market liquidity , solvency ratio , net interest margin , financial system , profitability index , business , solvency , return on assets , profit margin , capital adequacy ratio , loan , financial ratio , finance , profit (economics) , economics , microeconomics
The purpose of this research is to analyse the financial performance of Arfak Indonesia Rural Bank in Manokwari Regency in the period of 2014 – 2018 using financial ratios include liquidity, solvency and profitability ratios. Liquidity ratio is measured using Loan to Deposit Ratio (LDR), solvency is measured using Capital Adequacy Ratio (CAR), and profitability ratio is measured using Net Profit Margin (NPM) and Return on Asset (ROA). The research results shows that in the past 5 years, the average value of LDR (113%) is too high which is above 80%, thus the bank does not have enough liquidity to cover any unforeseen fund requirement. Furthermore, the average value of CAR (10.67%) was between the value of 9.5% and 11%, which indicates that the bank has enough capital to cushion potential losses and protect depositor’s money. As for the average value of NPM (39.46%) and ROA (6.73%) shows that the bank has a very good ability in generating profits.