JER
Vol. 5 No. 2 (2022): September-April

Effect of Liquidity and Solvency on Profitability of Banking Companies in Indonesia

Hariatih Hariatih (Institut Teknologi dan Bisnis Nobel Indonesia, Makassar)
Indrawan Aziz (Institut Teknologi dan Bisnis Nobel Indonesia, Makassar)



Article Info

Publish Date
30 Sep 2022

Abstract

This study aims to determine the effect of liquidity and solvency on profitability as one of the company's main objectives. The population in this study was 36 banks listed on the Indonesia Stock Exchange for the period 2014-2018. This research was conducted using secondary data from the Indonesia Stock Exchange (IDX). Sample selection was made using the purposive sampling technique. Of the 36 banks listed on the Indonesia Stock Exchange, ten have had a positive profitability trend in the last four years. The type of data used in this research is quantitative data. The data was obtained from the official website of the Indonesia Stock Exchange, namely www.idx.co.id, in the form of quarterly financial reports (March 2014-September 2018). Go public, commercial banks. The data collection technique used in this research is the method of documentation analysis or literature study. The results obtained are 1) Liquidity variable (LDR) has a positive and significant effect on the profitability (ROE) of banks listed on the Indonesia Stock Exchange. 2) Solvency variable (DER) has no (negative) and no significant effect on the profitability (ROE) of banks listed on the Indonesia Stock Exchange. 3) Liquidity (LDR) and Solvency (DER) variables have a significant positive effect on the profitability (ROE) of banks listed on the Indonesia Stock Exchange.

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Journal Info
JER

Abbrev

JER

Publisher

Subject

Humanities Decision Sciences, Operations Research & Management Economics, Econometrics & Finance

Description

Jurnal Economic Resource_(JER) is open access. This journal is published in _ March & September. Journal of Economic Resources|e-ISSN 2620-6196] is a peer-reviewed journal published twice a year (March & September) by the Faculty of Economics and Business, Universitas Muslim Indonesia_UMI. Journal ...