THE RELATIONSHIP OF CR, CATAR, CLTAR, DTAR, ROA AND ROE OF 9 PUBLIC LISTED BANKS IN INDONESIA (MANDIRI, CIMB NIAGA, PERMATA, BTN, DANAMON, BCA, ICB BUMIPUTERA, BNI, BRI) PERIOD 2008 - 2012

Abstract

This study aims to find out the relationship between liquidity management and working capital management toward profitability of banks. The 2008 financial crisis caused by severe liquidity problem faced by financial institutions had driven notable banks to bankruptcy worldwide. In Indonesia, few banks had gone down because of the crisis, while most of them suffer decreased profit. This study can give pointers to banks to increase their profit by maintaining a good management of liquidity and working capital. Researcher studied 9 public listed banks in Indonesia, using quarterly issued financial statements from 2008 – 2012. Researcher applied multiple regression testing to find out the relationship between current ratio, current asset to total asset ratio, current liabilities to total asset ratio and debt to total asset ratio toward return on asset and return on equity. Researcher found out CR, CLTAR, and DTAR significantly affect ROA, while ROE significantly affected by CLTAR.