The Effect of Return on Assets, Debt to Assets Ratio and Net Proft Margin on Profit Growth of Basic and Chemical Industry Sector Companies in Indonesia Stock Exchange

Abstract

This study aims to determine the effect of ROA, DAR and NPM on profit growth of companies in the basic industry and chemical sectors on the Indonesia Stock Exchange for the period 2016-2019. This research is a quantitative study where information is obtained from secondary data. Information gathering technique is literature study. The information in this study was obtained from the Indonesia Stock Exchange website. This data was obtained from companies in the basic and chemical industry sectors listed on the Indonesia Stock Exchange for the period 2016-2019. Random sampling technique. The data analysis technique in this study is the Classical Assumption Test. The conclusions obtained based on the discussion above are as follows: first, the variable Return on Assets (ROA) has a significant and positive effect on profit growth in basic industrial and chemical sector companies listed on the Indonesia Stock Exchange for the period 2016 - 2019. Second, the variable Debt To Assets Ratio (DAR) has no significant and positive effect on profit growth of companies in the basic and chemical industry sectors listed on the Indonesia Stock Exchange for the period 2016 - 2019. Third, the Net Proft Margin (NPM) variable has a significant and positive effect on the profit growth of basic industry and chemical sector companies listed on the Indonesia Stock Exchange for the period 2016 - 2019. Fourth, the variable Return On Assets (ROA), Debt To Assets Ratio (DAR) and Net Proft Margin (NPM) simultaneously have a significant and positive effect on profit growth in basic and chemical industry sector companies listed on the Indonesia Stock Exchange for the period 2016 - 2019.

Keywords: ROA, DAR, NPM, Profit Growth