Abstract:
The objective of this research is to examine the usefulness of Gross Profit
Margin (GPM), Net Profit Margin (NPM), Operating Profit Margin (OPM), Return
on Asset (ROA), Return on Equity (ROE), Inventory Turnover (IT), Total Asset
Turnover (TAT), Current Ratio (CR), Debt to Equity (DTE), and Leverage Ratio
(LR) in predicting the growth of earnings in manufacturing companies.
The sampling technique used in this research used in this research is
purposive sampling, with some criteria, those are: (1) manufacture company listed
in ISX and still operating consistently during the research period; (2) the company
does not exit (delisting) on the JSE during the study period; (3) during the period of
research, firm earns positive profits; (4) company that has positive financial ratio.
The result of this research shows that the data has fulfill the classical
assumption, such as; no multicolinearity, no autocorrelation, no heteroscedasticity
and distributed normally. From the bivariate test, found that only six ratios may
entered into multivariate model, which are: Gross Profit Margin (GPM), Operating
Profit Margin (OPM), Return on Equity (ROE), Inventory Turnover (IT), Total
Asset Turnover (TAT), and Debt to Equity (DTE. Besides, from the regression
analysis, it can be concluded, partially Inventory Turnover (IT), Total Asset
Turnover (TAT), Return on Equity (ROE) and Operating Profit Margin (OPM)
have a positive significant to profit growth of manufacture company. From the
research also known that six variables (GPM, IT, TAT, ROE, DTE, and OPM)
simultaneously have an influence in predicting the profit growth in manufacture
company. The prediction percentage of those variables simultaneously is 38.7%
