THE DETERMINANT FACTORS ON PREDICTING THE PROFIT GROWTH OF INDONESIA’S PROPERTY AND REAL ESTATE FIRMS

Abstract

The one crucial thing about the company’s financial performance is its appearance of profit. When the profit has developed continuously every year, it could be a better performance and growth. Hence, specifically, profit growth is one of the parameters of the company’s financial performance. This research purposes to empirically examine the influence of seven independent variables on predicting the profit growth of property and real estate firms listed on the Indonesia Stock Exchange (IDX). The companies’ determining criteria are seventeen companies in the property and real estate sector with the year 2013 until 2018 annual financial report data are the selected period. This research adopts quantitatively, using secondary data by collecting the observation data from the IDX and the company’s official website with sampling method and panel data. The technique applies multiple linear regression adopted by the fixed-effect model. The result shows five out of seven independent variables that have a significant influence to predict profit growth. Those five variables are a debt to equity ratio, total asset turnover, gross profit margin, net profit margin, and firm size. It partially influences, while all independent variables simultaneously significant in predicting the profit growth with 41.35% contribution.