The Effect of Debt-To-Equity Ratio (Der), Net Profit Margin (Npm), and Return-on-Investment (Roi) on Profit Growth

International Journal of Economics and Management Studies

© 2021 by SSRG - IJEMS Journal

Volume 8 Issue 10

Year of Publication : 2021

Authors : Haryono Umar, Nur Fajri, Agustina Indriani

10.14445/23939125/IJEMS-V8I10P116

How to Cite?

Haryono Umar, Nur Fajri, Agustina Indriani, "The Effect of Debt-To-Equity Ratio (Der), Net Profit Margin (Npm), and Return-on-Investment (Roi) on Profit Growth," SSRG International Journal of Economics and Management Studies, vol. 8,  no. 10, pp. 124-132, 2021. Crossref, https://doi.org/10.14445/23939125/IJEMS-V8I10P116

Abstract:

This study aims to examine the effect of Debt to Equity Ratio, Net Profit Margin and Return on Investment on profit growth in manufacturing companies in the consumer goods industry sector of the pharmaceutical sub-sector in the year listed on the Indonesia Stock Exchange on profit growth in the period 2014 to 2019. The subjects used in this study are manufacturing companies in the consumer goods industry sector of the pharmaceutical sub-sector, which are listed on the Indonesia Stock Exchange. The period used is 2014-2019. Based on those criteria, the data obtained from the report published by the IDX were comprised of 10 companies as the study samples. Meanwhile, the study used panel data regression with least-squares equation and hypothesis testing using t-statistics to test the partial regression coefficients. Next, f-statistics was used to test the simultaneous effect at the significance level of 5%. Based on the analysis results using software reviews version 10, it was revealed that: (1) Debt to Equity Ratio (DER) had a positive and significant effect on Profit Growth; (2) Net Profit Margin (NPM) has a positive and significant effect on Profit Growth; (3) Return on Investment (ROI) has a negative but not significant effect on profit growth; (4) Debt to Equity Ratio (DER), Net Profit Margin (NPM) and Return on Investment (ROI) have a positive and significant effect on profit growth.

Keywords:

Net Profit Margin (NPM), Return On Investment (ROI), Debt to Equity Ratio (DER), Profit growth.

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