THE DETERMINANT FACTORS OF PROFITABILITY IN INDONESIA CONSUMER GOODS MANUFACTURING COMPANIES
Abstract
This study aims to analyze the determinants of profitability in Indonesian Consumer Goods Manufacturing Companies from 2015 to 2019. The external factors analyzed are inflation rates, interest rates, and foreign currency exchange rates. Meanwhile, the internal factors analyzed are the working capital turnover ratio. In addition, profitability is measured by the ratio of return on equity. This research is a quantitative study using unbalanced panel data regression analysis. Data is collected from Bank Indonesia, the Indonesia Stock Exchange, and the websites of each company. This study analyzes new unbalanced panel data from 245 years of company observations from 53 Indonesian Consumer Goods Manufacturing Companies. The results showed that the external factors of the inflation rate had a significant negative effect on profitability. Meanwhile, other factors such as interest rates, foreign currency exchange rates and working capital turnover did not have a significant effect on profitability.