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Journal : Journal La Bisecoman

The Effect of Financial Leverage on Earnings Per Share and Return on Equity: JEL Classification: G21, G32, M41, C12, G33 Hasriani, Hasriani; Sugianto, Sugianto; Nursyamsuriana, Nursyamsuriana; Sutriana, Sutriana; Mauna, Randy; Jumriani, Jumriani
Journal La Bisecoman Vol. 6 No. 4 (2025): Journal La Bisecoman
Publisher : Newinera Publisher

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.37899/journallabisecoman.v6i4.2654

Abstract

This study aims to analyze the effect of financial leverage on earnings per share (EPS) and return on equity (ROE) in the banking sector of State-Owned Enterprises (SOEs) listed on the Indonesia Stock Exchange (IDX) from 2020-2024. Financial leverage is measured using the debt-to-equity ratio, while EPS and ROE are used as indicators of the company's financial performance. The research method used is quantitative with an ex post facto approach, utilizing secondary data obtained from annual financial reports for the 2020-2025 period. Data analysis was conducted using a simple linear regression test to measure the relationship and effect of financial leverage on EPS and ROE. The results show that financial leverage has a significant and negative effect on EPS in SOE banking companies listed on the Indonesia Stock Exchange (IDX). This indicates that loan interest expenses erode net income per share, thereby reducing shareholder welfare, and that the debt financing structure is not offset by increased interest income or operational efficiency. Financial leverage does not have a significant and positive effect on ROE in SOE banking companies listed on the IDX, indicating that banking management is able to maintain equity profitability despite increases or decreases in leverage levels.
Co-Authors Abdul Rahman Adil Adil, Adil Adriani, Fitri Agus Syam Agustina, Ella Akbardin, Muh. Akbardin, Muhammad Akhsan Akhsan Ambarsyah, Andi Muhammad Barkah Amelinda, Ria Andi Dian Fitriana Andi Karman, Andi Karman Andriani Andriani Anzhari, A.Muh Ardi, Muh. Arfah, Muhammad Isra Chikah Arham, M. Nur Asirie, Ronny Achmad ASMAYANTI, ASMAYANTI Asnur, Asnur Asridiana, Asridiana Assyauqi, Mohamad Iqbal Astiti, Suci Putri Aulia Rahmadhani Aulia, Sabita Besse Mutmainnah Chikah Arfah, Muhammad Isra' Damis, Sariana Darussalam, Fajrul Ilmy Deasy Arisanty Deliavisa, Deliavisa Dewi, Hefi Rusnita Dyah Puspitasari Ningthias Erlina Wiyanarti Erman Syarif Erniawati, Erniawati Ersis Warmansyah Abbas Fahrika, Andi Ika Faisal, Andi Fahri Fathul Jannah, Fathul Fauzi, Zain Ahmad Fazila, Aditia Silvia Fazri, Ahmad Febrian, Muhammad Ikhsan Firdaus, Ahmad Maulana Firdaus, Akhmad Maulana Fony, Fony H Hasmawati Hadi, Noorya Tasya Febrylia Witari Hamsah, Hamsah Hamzah, Munira Hapipah, Raina Harnida Harnida, Harnida Haryanti Putri Rizal Hasan Hasan Hasanah, Mahmudah Hasanuddin Hasanuddin Hasniar Hasniar, Hasniar Hasriani , Hasriani Hasriani Hasriani, Hasriani Hassan, Muhammad Ikram bin Abu Hastati, Sri Helmi Akmal Helmi Akmal, Muhammad Heri Susanto Hery Porda Nugroho Putro Hery Widijanto Hidayat Putera, M. Adhitya Hizbullah, Hizbullah Idris, Ismayanti Idrus, Maghfira Imran Rosadi Inaya, Nurul Indra, Andi Batara Islam, Muhammad Fajar Jafar Jafar Jayawarsa, A.A. Ketut Jumadi Jumadi Kallabe, Amirah Kanukisya, Blackson Karunia Puji Hastuti, Karunia Puji Keri, Ismail La Ode Turi Ladung, Fajar Liasari, Ira Lisaw, Irwani Lubis, Bastian M, Nurwani Ma'rufi, Ma'rufi Magfirah, Magfirah Makmur Makmur Mangga, Andi Rahmatullah Mas'ud, Masdar Maulidah, Dina Mauna, Randy McKenna, Tarquam Monry Fraick Nicky Gillian Ratumbuysang Muh Dirwan Muhaimin Muhaimin Muhajir Muhajir, Muhajir Muhammad Adhitya Hidayat Putra Muhammad Muhaimin Muhammad Rezky Noor Handy Muhammad Ridha Ilhami Muhammad Yusuf Dwiyanto Muhtar Muhtar Munawarah Munawarah, Munawarah Munawarah, Madinatul Mutiani Mutiani Najib, Hikam Ainun Nana Supriatna Nanda Nanda Noor Handy, M. Rezky Nor Indriyanti Nugraheny, Aulia Riska Nur Aida, Wanda Nur Azizah, Putri Nur Halim Nur Rahmah Nur Rahmi Nur Syam Nur'aini, Fatwa Nur, Nur Eni Nurbaety, Nurbaety Nurhikma Ramadhana Nurmiati Nurmiati Nursyamsuriana, Nursyamsuriana NURUL AZIZAH Nurul Hasanah Nurwanah, Nurwanah Nur’aini, Fatwa Ophir, Yotam Otong Karyono, Otong Parida Angriani Perminas, Diana Pitriyani Pitriyani Pratiwi, Elsa Priyambodo, R. Ardian Puspita, Rizky Martha Cahya Putri Putri, Putri Putri Yayu Putri. M, Aisca QUDRATUDDARSI, HILMAN R, Abd. Rasyid Raden Mohamad Herdian Bhakti Rahma, Annisa Rahmah Abu, Sitti Rahmawati, Rahmawati Rahmia, Sovia Husni Ramadhan, M. Adhitya Ramadhani, Aisyah Ramadhani, Muhammad Aqiela Ramadhani, Sitti Fatimah Ramos, Nurdiana Resmi Resmi Restiani, Vira Rhamdan, Donna Rianthy, Gina Anggi Ridha Ilhami, M. Rochgiyanti Rosalini, Isabella Rusmaniah, Rusmaniah Sadariah, Sadariah Safitri, Rahmah Diani Sanitad, Ni Made Divya Saputri, Ema Lia Sari, Raihanah Satriani Satriani Sembiring, Rinawati Sigit Triyono Siti Maimunah Sitti Nikmah Marzuki, Sitti Nikmah Subehana Rachman Subiyakto, Bambang Sugianto Sugianto Suherman, Suherman Sumarni Sumarni Surianto Ilham Susilawati, Aay Susiyanti, Susiyanti Sutriana, Sutriana Suwanda Suwanda Syaharuddin Syahruddin Syahruddin SYAKILA, Fatika Syamsunardi, Syamsunardi Syarifuddin Syarifuddin Syarifuddin, Syarifudin Thaha, Hisban Tri Yubiah Triyono, Sigit Tuada, Rasydah Nur Wahyudadi, Badai Septa Wardinah, Yulie Wibowo, Hadi Yudho Prio Widyastuti, Nugraheni Winarti Winarti Yadi Arodhiskara, Yadi Zaha, Ali Purnama Zain Fauzi, Muhammad Zainuddin, Fatlina Zamli Zulkifli Zulkifli