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The Effect Of Financial Leverage And Operating Leverage On Company Profitability Qurochman, Arief Nurdiannova; Putra, Arjuna Nur Alfian Syah
International Journal on Social Science, Economics and Art Vol. 14 No. 2 (2024): August: Social Science, And Economics
Publisher : Institute of Computer Science (IOCS)

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Abstract

This research aims to analyze the effect of financial leverage (DFL) and operating leverage (DOL) on company profitability (ROE) both simultaneously and partially in banking sub-sector companies listed on the BEI for the 2020-2022 period. This research was conducted using multiple linear regression analysis. Based on the results of the F test, it is known that DFL and DOL simultaneously influence ROE, this is proven by a significance level that is smaller than 0.05, namely 0.023. Based on the results of the t test, it is known that DFL partially has no effect on ROE, this is proven by a significance level greater than 0.05, namely 0.432. Based on the results of the t test, it is also known that DOL partially has a significant negative effect on ROE, this is proven by a significance level that is smaller than 0.05, namely 0.373. The strength of the relationship between the variables DFL, DOL and ROE is shown by the adjusted coefficient of determination (Adjusted R square) which is only 0.137 or 13.7%.