The effect of financial ratios on income growth in agricultural companies registered in Indonesia /stock Market

Abstract

The Effect of Financial Ratios on Profit Growth in Agricultural Companies Listed on the Indonesia Stock Exchange. The purpose of this study is to find out how the influence of financial ratios on profit growth in agricultural companies listed on the Indonesia Stock Exchange during 2017-2019. The independent variables used in this study are Current Ratio (X1), Debt to Equity Ratio (X2), and Net Profit Margin (X3), while the dependent variable is Profit Growth (Y). This study uses descriptive statistics, multiple linear regression statistics, classical assumption test, t test, f test and coefficient of determination. Based on the results of multiple linear regression, the regression equation can be as follows Y = 10,044 – 0,13X₁ – 0,11X₂ + 0,108X₃. The results showed that the Current Ratio (X1) partially has no effect on profit growth where the value is significant < 0,05 (0,097≥0,05), Partially, the Debt to Equty Ratio has no effect on profit growth where the value is significant signifikan < 0,05 (0,337≥0,05), and Net Profit Margin partially affects profit growth which is significant < 0,05 (0,001<0,05). Meanwhile, CR, DER, and NPM have effect simultaneously where the value is significant < 0,05 (0,009<0,05) and Adjusted R Square 0.347. This means that 34.7% of the variations that occur affect profit growth, the difference of 6.53% is influenced by other variables which are not examined in this study.