<![CDATA[Return on Equity (ROE) of banking companies listed on the Indonesia Stock Exchange experienced fluctuations during the 2018–2025 period. These fluctuations were presumed to be influenced by the level of capital adequacy reflected in the Capital Adequacy Ratio (CAR) and the level of credit risk measured by the Non Performing Loan (NPL) ratio. This study aims to analyze the effect of Capital Adequacy Ratio (CAR) and Non-Performing Loan (NPL) on Return on Equity (ROE) of banking companies listed on the Indonesia Stock Exchange during the 2018–2025 period, both partially and simultaneously. This study employed a quantitative method with an associative approach. The sample was selected using a purposive sampling technique, resulting in six banking companies with a total of 48 observations. Data were analyzed using IBM SPSS Statistics Version 26. The results indicate that Capital Adequacy Ratio (CAR) has a positive and significant effect on Return on Equity (ROE) (t = 3.627; Sig. = 0.001) with a partial coefficient of determination of 22.7%. Non-Performing Loan (NPL) has a negative and significant effect on Return on Equity (ROE) (t = -6.774; Sig. = 0.000) with a partial coefficient of determination of 50.5%. Simultaneously, Capital Adequacy Ratio (CAR) and Non-Performing Loan (NPL) have a significant effect on Return on Equity (ROE) (F = 36.292; Sig. = 0.000). The coefficient of determination (R² = 0.617) indicates that both independent variables explain 61.7% of the variation in Return on Equity (ROE), while the remaining 38.3% is influenced by other factors outside the research model. In conclusion, Capital Adequacy Ratio (CAR) and Non-Performing Loan (NPL), both partially and simultaneously, have a significant effect on Return on Equity (ROE) in banking companies listed on the Indonesia Stock Exchange during the 2018–2025 period.]]>
