THE INFLUENCE OF PROFITABILITY AND LIQUIDITY TO CAPITAL ADEQUACY (A CASE STUDY OF COMMERCIAL BANKS LISTED ON IDX FROM JANUARY 2010 to SEPTEMBER 2013)

Abstract

The researcher would like to present a research regarding the influence of profitability and liquidity to capital adequacy (case study in commercial banks from January 2010 to September 2013). Based on this research, researcher tries identifying the influence between Net Interest Margin (NIM) and Return on Asset (ROA) as profitability instruments, Loan to Deposit Ratio (LDR) and Non-Performing Loan (NPL) as liquidity instrument to Capital Adequacy Ratio (CAR) as measurement of capital. Furthermore, there are three of commercial banks those are: PT Bank Mandiri Tbk, PT BRI Tbk, PT BNI Tbk. Data used in this research is secondary data was obtained from the financial report of Indonesia Stock Exchange (IDX) publications and bank reports through the website which is quarterly data from 1st Quarter of 2010 to 3rd Quarter of 2013.This research used panel data which using multiregression model where those are data had been tested by using the classic assumption test, such as: normality, autocorrelation, multicollinearity, and heteroscedasticity tests. The classic assumption tests indicate that the available data have fulfill the condition to use multiregression model. Empirical evidence show as NPL, NIM, ROA, and LDR are significant simultaneous toward CAR. However, in partially NIM, ROA, and LDR are significant toward CAR, while on the other hand NPL is not significant toward CAR.