The Effect of Credit Risk and Capital Adequacy Ratio Upon Return on Asset (a Case Study at Banking Listed in Indonesia Stock Exchange)

The Accounting Journal of Binaniaga Vol. 02, No. 02, December 2017

16 Pages Posted: 1 Jul 2019 Last revised: 17 Jun 2020

See all articles by Yuli Anwar

Yuli Anwar

Sekolah Tinggi Ilmu Ekonomi Binaniaga

Etty Murwaningsar

affiliation not provided to SSRN

Date Written: December 31, 2017

Abstract

The aim of the study to examine the effect of credit risk as measured by non-performing loan, and capital adequacy ratio to profitability level measured by return on assets in banking companies listed in Indonesia Stock Exchange (IDX). This research belongs to causative research. The population in this study is the state-owned banks listed on the Indonesia Stock Exchange. The sample of this study is determined by purposive sampling method so that obtained four sample companies. The type of data used is secondary data obtained from idx.co.id. The analysis the method used is multiple regression analysis, correlation, determination and partial test of hypothesis with t-test and simultaneously with F test. Based on the results of multiple regression analysis with 5% significance level, the results of this study conclude: (1) non-performing loan has a negative and significant influence on profitability in banking companies listed on Indonesia Stock Exchange (2) capital adequacy ratio positively affect profitability on banking industry listed on Indonesia Stock Exchange. So simultaneously and together it can be concluded that NPL and CAR have an effect on ROA.

Keywords: non-performing loan, capital adequacy ratio, return on asset

JEL Classification: G32

Suggested Citation

Anwar, Yuli and Murwaningsar, Etty, The Effect of Credit Risk and Capital Adequacy Ratio Upon Return on Asset (a Case Study at Banking Listed in Indonesia Stock Exchange) (December 31, 2017). The Accounting Journal of Binaniaga Vol. 02, No. 02, December 2017, Available at SSRN: https://ssrn.com/abstract=3412025

Yuli Anwar (Contact Author)

Sekolah Tinggi Ilmu Ekonomi Binaniaga ( email )

Jl. Pajajaran No. 100
Kel. Bantarjati Kec. Bogor Utara
Bogor, Jawa Barat 16153
Indonesia
622518360688 (Phone)

HOME PAGE: http://www.stiebinaniaga.ac.id

Etty Murwaningsar

affiliation not provided to SSRN

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
135
Abstract Views
562
rank
253,530
PlumX Metrics