Abstract:
Financial ratio is the indicator to understand and take action over a company. The
significance of the researcher is determined on the basis of the following
parameters: applied aspect and theoretical contribution of the body of the
knowledge. The model developed for the study may be used effectively to
manage liquidity, leverage, and sales growth for the profitability of the company.
The population has been taken from property and real estate sector listed in
Indonesia Stock Exchange and from the 58 companies, the researcher have
selected seven property and real estate companies of Indonesia and have
compiled 5 years data of these companies (2011-2015). Current ratio has
negative significant influence towards return on assets because the companies
have a lot of inventories which is least liquid in current assets. Debt ratio has
negative significant influence towards return on assets; it happens because the
companies use more debts to finance its assets. This situation can lead in to
decreasing of profitability. Sales growth has positive influence towards return on
assets which indicates that the companies will increase their profit buy increasing
their revenue. Current ratio, debt ratio, and sales growth are having significant
influence toward the return on assets.
