THE INFLUENCE OF FINANCIAL PERFORMANCE AND MACROECONOMIC FACTORS TOWARD PROFITABILITY RATIO IN BASIC INDUSTRY AND CHEMICAL SECTOR IN INDONESIA

Abstract

This research examining factor influencing company’s profitability in basic industry and chemical sector companies in Indonesia. The research objective is to investigate the influence of financial performance and macroeconomic factors that influence the company profitability. The factor that used in this research is DER, TATO, Firm Size, and macroeconomic factor are inflation and GDP. The research methodology uses a quantitative method with multiple regression analysis to analyze the influence of independent variables toward the dependent variable. This sample adopt purposive sampling and panel data, and it was taken from IDX and company official website that listed for period of 2012-2017 that analyzed using fixed effect model that has been pass the classical assumption test to ensure the valid result if the test. The result shows that total assets turnover, firm size and GDP has partially significant influence toward return on equity. However the inflation rate has positive insignificant influence toward return on equity, while, debt to equity ratio has negative significant influence toward return on equity. Simultaneously, all independent variables have significant influence toward the profitability that describe in 58.9972% while the other 41.0028% is describe by other variable which are not examined in this research.