The Effect of Investing Policy Ratio, Net Profit Margin, Loan to Deposit Ratio and Return on Asset on Capital Adequacy Ratio in Banking Companies Listed in The Indonesia Stock Exchange

Fanny Dewi Lie Gunardy; Melisa Cantika Dewi; Siti Dini; Anggono Anggono

doi:10.37385/ijedr.v5i1.4522

Authors

Fanny Dewi Lie Gunardy Universitas Prima Indonesia
Melisa Cantika Dewi Universitas Prima Indonesia
Siti Dini Universitas Prima Indonesia
Anggono Anggono Universitas IBBI

DOI:

https://doi.org/10.37385/ijedr.v5i1.4522

Keywords:

Investing Policy Ratio, Net Profit Margin, Loan to Deposit Ratio, Return on Asset, Capital Adequacy Ratio

Abstract

The aim of this research is to examine the influence of Investment Policy Ratio, Net Profit margin, loan to Deposit Ratio, Return on Assets and Capital Adequacy Ratio. In this research, researchers used quantitative research methods. The population used in the research was 53 banking companies and a sample of 29 banks with a total of 87 observations. The data analysis techniques used multiple linear regression analysis with SPSS version 26. The research results show that the Investing Policy Ratio and Net Profit Margin have no effect on the Capital Adequacy Ratio. Loan to Deposit Ratio has a positive and significant effect on the Capital Adequacy Ratio. Return on Assets has a negative and significant effect on the Capital Adequacy Ratio. Investing Policy Ratio, Net Profit Margin, Loan to Deposit Ratio and Return on Assets simultaneously have a positive and significant effect on the Capital Adequacy Ratio in banking companies listed on the Indonesia Stock Exchange. The determination size of 14.4% means that the Investing Policy Ratio, Net Profit Margin, Loan to Deposit Ratio and Return on Assets can explain the Capital Adequacy Ratio in banking companies listed on the Indonesia Stock Exchange.

References

Abdurrohman, A., Fitrianingsih, D., Salam, A. F., & Putri, Y. (2020). Pengaruh Capital Adequacy Ratio (CAR), Loan To Deposit Ratio (LDR) Dan Non Performing Loan (NPL) Terhadap Return On Asset (ROA) Pada Sektor Perbankan Di Bursa Efek Indonesia. Jurnal Revenue: Jurnal Ilmiah Akuntansi, 1(1), 125-132.

Adam, M. H. M. (2014). Evaluating the Financial Performance of Banks using financial ratios-A case study of Erbil Bank for Investment and Finance. European Journal of Accounting Auditing and Finance Research, 2(6), 162-177.

Afiyanti, A., & Hardiyanti, W. (2020). Impact Analysis Of Capital Adequacy Ratio (Car) And Return On Asset (Roa) On Financing Of Murabaha On Sharia Bank In Indonesia Period Year 2014-2018. Jurnal EMBA: Jurnal Riset Ekonomi, Manajemen, Bisnis Dan Akuntansi, 8(3).

Anwar, Y., & Murwaningsar, E. (2017). The effect of credit risk and capital adequacy ratio upon return on asset (a case study at banking listed in Indonesia Stock Exchange). The Accounting Journal of Binaniaga, 2(02).

Anggari, N. L. S., & Dana, I. M. (2020). The effect of capital adequacy ratio, third party funds, loan to deposit ratio, bank size on profitability in banking companies on IDX. American Journal of Humanities and Social Sciences Research (AJHSSR), 4(12), 334-338.

Bateni, L., Vakilifard, H., & Asghari, F. (2014). The influential factors on capital adequacy ratio in Iranian banks. International Journal of Economics and Finance, 6(11), 108-116.

Brastama, R. F., & Yadnya, I. P. (2020). The effect of capital adequacy ratio and non performing loan on banking stock prices with profitability as intervening variable. American Journal of Humanities and Social Sciences Research (AJHSSR), 4(12), 43-49.

Dao, B. (2020). Bank capital adequacy ratio and bank performance in Vietnam: A simultaneous equations framework. Journal of Asian Finance, Economics and Business, 7(6), 039-046.

Herizal, M., Diana, D., Rezti, R., & Suryani, S. (2022). The Effect of Capital Adequacy Ratio, Loan to Deposit Ratio, and Operational Costs than Operating Revenue on Return on Assets: Study on Conventional Banks in Indonesia. Hut Publication Business and Management, 1(2), 42-59.

Iskandar, Y. (2020). the Influence of Capital Adequacy Ratio, Loan-To-Deposit Ratio, and Net Interest Margin on Stock Return At Commercial Banks in Indonesia. Jurnal Aplikasi Manajemen, 18(3), 533-538.

Jha, S., & Hui, X. (2012). A comparison of financial performance of commercial banks: A case study of Nepal. African Journal of Business Management, 6(25), 7601.

Kadim, A., Sunardi, N., & Husain, T. (2020). The modeling firm's value based on financial ratios, intellectual capital and dividend policy. Accounting, 6(5), 859-870.

Kurniawan, A. (2021). Analysis of the effect of return on asset, debt to equity ratio, and total asset turnover on share return. Journal of Industrial Engineering & Management Research, 2(1), 64-72.

Madugu, A. H., Ibrahim, M., & Amoah, J. O. (2020). Differential effects of credit risk and capital adequacy ratio on profitability of the domestic banking sector in Ghana. Transnational Corporations Review, 12(1), 37-52.

Noor, M. I., & Rosyid, P. I. (2018). Effect of capital adequacy ratio (CAR), loan to deposit ratio (LDR) and return on equity (ROE) on share price PT Bank Danamon Indonesia, TBK. International Journal of Business and Applied Social Science (IJBASS) Vol, 4.

Puspitasari, E., Sudiyatno, B., Hartoto, W. E., & WIDATI, L. W. (2021). Net interest margin and return on assets: A Case Study in Indonesia. The Journal of Asian Finance, Economics and Business, 8(4), 727-734.

Sari, Y. A. N., & Murni, N. S. I. M. (2017). Analysis of the effect of third party fund, capital adequacy ratio, and loan to deposit ratio on bank? s profitability after the application of IFRS. The Indonesian Accounting Review, 6(1), 81-90.

Sunaryo, D. (2020). The effect of capital adequacy ratio (CAR), net interest margin (NIM), non-performing loan (NPL), and loan to deposit ratio (LDR) against return on Asset (ROA) in general banks in Southeast Asia 2012-2018. Ilomata International Journal of Management, 1(4), 149-158.

Suroso, S. (2022). Analysis of the Effect of Capital Adequacy Ratio (CAR) and Loan to Deposit Ratio (LDR) on the Profits of Go Public Banks in the Indonesia Stock Exchange (IDX) Period 2016–2021. Economit Journal: Scientific Journal of Accountancy, Management and Finance, 2(1), 45-53.

Syifa, A. (2018). The Impact Of Non Performing Finance (NPF), Capital Adequacy Ratio (CAR), And Financing Deposit Ratio (FDR) To Return On Asset (ROA) With Depositor Funds As A Moderating Variable In Islamic Banks. Jurnal Akuntansi Berkelanjutan Indonesia, 1(2), 168.

Torbira, L., & Zaagha, A. S. (2016). Capital adequacy measures and bank financial performance in Nigeria: A cointegration analysis. Journal of Finance and Economic Research, 3(1), 15-34.

Vellanita, A., Arimbawa, I. G., & Damayanti, E. (2019, November). Relationship Between Non Performing Loans (Npl), Capital Adequacy Ratio (Car), Loan To Deposit Ratio (Ldr) Towards Return on Equity (Roe) At Pt. Bank Central Asia 2014–2018. In Journal of world conference (JWC) (Vol. 1, No. 2, pp. 211-216).