Business, Management and Accounting
3 years ago

ROA boosts, ROE hinders: Banking sector's capital adequacy ratio impacted.

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Uniqbu Journal of Social Sciences
THE EFFECT OF RETURN ON ASSET (ROA) AND RETURN ON EQUITY (ROE) ON CAPITAL ADEQUACY RATIO (CAR) IN THE LQ 45 LIFTING BANKING SECTOR ON THE INDONESIA STOCK EXCHANGE: Pengaruh Return on Asset (Roa) dan Return on Equity (Roe) Terhadap Capital Adequacy Ratio (Car) Pada Sektor Perbankan Indeks Lq 45 Lifting Di Bursa Efek Indonesia
Muhtyaningsih Harum Ode Halidu

Paper Summary

The study looked at how Return On Assets (ROA) and Return On Equity (ROE) impact the Capital Adequacy Ratio (CAR) in banking companies on the Indonesia Stock Exchange. They analyzed data from 5 banking companies in the Lq 45 index using multiple linear regression. The results showed that ROA has a significant positive effect on CAR, while ROE has a significant negative effect on CAR.

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