The Effect Of Financial Ratios On Profit Growth In Indonesian Pharmaceutical Subsector Companies Listed on the Indonesia Stock Exchange

Abstract

This study was conducted to examine the effect of Net Profit Margin (NPM), Debt to Equity Ratio (DER), Total Asset Turnover (TAT), on Profit Growth. This study uses secondary data sourced from the financial reports of Pharmaceutical Companies for the 2019-2021 period obtained from the Indonesia Stock Exchange website. The population of this study was 25 Pharmaceutical Companies. The sampling method used was the purposive sampling method, resulting in 20 sample companies for 3 years of observation (2019-2021) with 60 observation data. The data analysis techniques used were descriptive statistical analysis and multiple regression analysis. The data analysis process carried out first was classical assumption testing, multiple regression analysis, descriptive statistics, and then hypothesis testing. The results of this study partially concluded that Net Profit Margin (X1) and Total Asset Turnover (X2) did not have a significant effect on profit growth. Debt to Equity Ratio (X3) had a partial effect on profit growth (Y). Meanwhile, the three independent variables simultaneously influenced profit growth.