The Effect of Debt to Equity Ratio (DER) and Sales Growth on ROA of Manufacturing Companies listed on the IDX for the 2021-2024 Period
DOI:
https://doi.org/10.55606/ijemr.v4i3.500Keywords:
Manufacturing Companies, Return-on Assets, Sales GrowthAbstract
Financial performance is a crucial indicator in evaluating business stability and success, with Return on Assets (ROA) as one of the main profitability measures. This study aims to examine the effect of Debt to Equity Ratio (DER) and Sales Growth on ROA in manufacturing companies listed on the Indonesia Stock Exchange (IDX) for the period 2021-2024. Using a quantitative approach with a comparative causal design, this study applied purposive sampling to 12 manufacturing companies from the paper and cement subsectors, resulting in 48 observations. Data analysis was conducted using multiple linear regression with SPSS 26. The research findings show that Sales Growth has a positive and significant effect on ROA with a coefficient of 0.082 (sig. 0.004), while DER has a negative and significant effect on ROA with a coefficient of -2.277 (sig. 0.000). Simultaneously, both variables have a significant effect on ROA with an R Square of 0.422, indicating that 42.2% of ROA variation can be explained by the model. These results imply that manufacturing companies need to optimize capital structure by managing debt levels wisely while implementing sustainable sales growth strategies to im- prove profitability performance.
References
M. Y. Sabakodi and H. H. Andreas, "The Effect of Capital Structure on Profitability of Manufacturing Companies in 2019–2022," *Owner: Riset dan Jurnal Akuntansi*, vol. 8, no. 1, pp. 377–390, Jan. 2024, doi: 10.33395/owner.v8i1.1934.
C. S. S. Febrianti, "Current Ratio," *Jurnal Ekonomi dan Bisnis*, vol. 4, no. 2, pp. 108–121, 2021.
H. Fitra and L. Al Ashry, "Effect of Sales Growth, ROE, ROA and FAR Towards DER in Real Estate and Property Companies in Indonesia Stock Exchange," in *Proc. 1st PICEEBA*, vol. 97, pp. 5–15, 2019, doi: 10.2991/piceeba-19.2019.2.
N. Dewi and I. H. Priyadi, "The Effect of Sales Growth, Profitability, and Leverage on Tax Avoidance in Mining Companies Listed in the Indonesian Sharia Stock Index (ISSI)," *Shafin: Sharia Financial Accounting Journal*, vol. 3, no. 1, pp. 65–78, 2023, doi: 10.19105/sfj.v3i1.8553.
D. Maryana and F. Rachmawati, "The Effect of Sales on Return on Assets at PT. Padalarang Paper (Security Paper Mill) for the 2020–2021 Period," *Land Journal*, vol. 5, no. 2, pp. 391–395, 2024, doi: 10.47491/landjournal.v5i2.3653.
S. Laily, "The Effect of Return on Asset, Return on Equity on Stock Prices in Food and Beverage Sub-Sector Manufacturing Companies Listed on the Indonesia Stock Exchange in 2019–2021," *Jurnal EMT Kita*, vol. 8, no. 1, pp. 80–87, 2024, doi: 10.35870/emt.v8i1.1851.
A. Widya and S. Aslamiyah, "The Effect of Current Ratio (CR), Debt Equity Ratio (DER), Total Asset Turnover (TATO) on Return of Equity (ROE) in the Manufacturing Industry of Consumer Goods Sector in 2019–2021," *Indonesian Vocational Research Journal*, vol. 3, no. 1, p. 30, 2023, doi: 10.30587/ivrj.v3i1.6233.
N. Fajira, "Analysis of Financial Performance Viewed From the Current Ratio (CR), Debt to Equity Ratio (DER) and Total Asset Turnover (TATO) in the Consumer Non-Cyclicals Sector Processed Food Registered at IDX in the 2017–2021 Period," *Jurnal Ilmu Manajemen*, vol. 3, no. 1, pp. 59–70, 2023.
J. Jurlinda, J. Alie, and M. Veronica, "The Effect of Debt to Asset Ratio and Debt to Equity Ratio on Return on Asset of Food and Beverage Industry Sector Companies Listed on the Indonesia Stock Exchange," *Journal of Social Science, Management, Accounting and Business*, vol. 3, no. 1, pp. 1–12, 2022, doi: 10.47747/jismab.v3i1.622.
P. Agviolita, S. Sudarti, and R. D. Handayani, "Comparative Analysis of Students' Critical Thinking Skills in Science Learning with Textbook Media and PhET Simulation Media," *Jurnal Edukasi MIPA*, vol. 12, no. 2, pp. 241–246, 2022, doi: 10.37630/jpm.v12i2.573.
Nafiudin, D. Andari, D. Kurnia, and A. T. Safitri, "The Importance of Job Redesign and Job Description for Improving Employee Performance During the Covid-19 Pandemic," *Science Management*, vol. 7, no. 2, pp. 155–167, 2021, doi: 10.30656/sm.v7i2.4139.
M. Arifin and T. Nugraha, "The Influence of Financial Ratios on Profitability in Manufacturing Companies," *Jurnal Ilmu dan Riset Akuntansi*, vol. 11, no. 3, pp. 12–22, 2022.
R. Utami and A. Hartono, "Impact of DER and CR on ROA in the Automotive Sector Listed in IDX," *Jurnal Manajemen dan Bisnis Indonesia*, vol. 10, no. 1, pp. 45–53, 2023.
S. R. Anindita, "Financial Performance Analysis Using ROA and DER at IDX-Listed Companies," *Jurnal Ilmu Ekonomi dan Bisnis*, vol. 9, no. 2, pp. 90–102, 2022.
A. Widodo and N. Wulandari, "Effect of Capital Structure on Company Profitability in the Textile Industry," *Jurnal Akuntansi dan Keuangan*, vol. 8, no. 4, pp. 33–42, 2023.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 International Journal of Economics and Management Research
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
