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Shela Difa Fusfita
Management Study Program, Faculty of Economics and Business, Pamulang University
Economics, Econometrics & Finance

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The Influence of Current Ratio & Debt To Equity Ratio on Return Of Equity at Bank BTPN for the Period 2013 - 2023 Fitra Nadira; Elia Putri; Shela Difa Fusfita; Nurwita Nurwita
Journal Development Manecos Vol. 3 No. 3 (2025): Journal Development Manecos
Publisher : Scieclouds Publishing

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.71435/738111

Abstract

This study investigates the impact of Current Ratio (CR) and Debt to Equity Ratio (DER) on Return on Equity (ROE) at Bank BTPN during the period 2013 to 2023. The objective is to understand how these financial metrics affect the bank's profitability. This study uses a quantitative approach, analyzing secondary data sourced from Bank BTPN's annual financial statements. The analysis includes testing classical assumptions (normality, multicollinearity, heteroscedasticity, and autocorrelation) followed by multiple linear regression to explore the relationship between the variables. The findings reveal a stable Current Ratio (CR), fluctuating between 1. 17 and 1. 23, indicating the bank's ability to meet short-term obligations. In contrast, Debt To Equity Ratio (DER) shows a significant decline from 5. 99 in 2013 to 3. 64 in 2023, reflecting a reduced reliance on debt. Although liquidity and capital structure remain healthy, Return Of Equity (ROE) declines from 22% in 2013 to 6% in 2023, indicating challenges in profitability despite good fund management. The results show that although Current Ratio (CR) is positively correlated with Return Of Equity (ROE), its impact remains insignificant. On the other hand, Debt To Equity Ratio (DER) exhibits a significant negative effect on Return Of Equity (ROE), implying that higher reliance on debt negatively impacts profitability. Overall, the study highlights the interrelated nature of these financial ratios and underlines the critical need for banks to optimize their financial structure to improve performance in a competitive sector.
The Influence of Current Ratio & Debt To Equity Ratio on Return Of Equity at Bank BTPN for the Period 2013 - 2023 Fitra Nadira; Elia Putri; Shela Difa Fusfita; Nurwita Nurwita
Journal Development Manecos Vol. 3 No. 3 (2025): Journal Development Manecos
Publisher : Scieclouds Publishing

Show Abstract | Download Original | Original Source | Check in Google Scholar

Abstract

This study examines the effect of Current Ratio (CR) and Debt to Equity Ratio (DER) on Return on Equity (ROE) at PT Bank BTPN Tbk during the 2013 to 2023 period. The study addresses the need to understand how liquidity and capital structure shape banking profitability in a competitive and regulated financial sector. A quantitative explanatory approach was applied using secondary data obtained from Bank BTPN’s published annual financial reports. The data were analyzed through classical assumption tests and multiple linear regression with SPSS Version 26. The normality, multicollinearity, heteroscedasticity, and autocorrelation tests indicate that the regression model meets the required statistical assumptions. The findings show that CR has a positive but insignificant effect on ROE, indicating that short-term liquidity does not directly increase shareholder returns. This suggests that liquidity functions mainly as a financial safety mechanism rather than a direct driver of profitability. In contrast, DER has a positive and significant effect on ROE, showing that capital structure plays a stronger role in explaining Bank BTPN’s profitability. The simultaneous test confirms that CR and DER jointly have a significant effect on ROE, with an R Square value of 0.870. These results imply that Bank BTPN’s profitability depends not only on maintaining liquidity, but also on optimizing the productive use of debt and equity. The study concludes that capital structure management is central to improving ROE, while liquidity must support operational stability and income-generating activities. These findings provide evidence for bank managers, investors, and future financial ratio studies in Indonesia.
Co-Authors Elia Putri Fitra Nadira Nurwita Nurwita