PROFITABILITY MODEL USING INTERVENINGS VARIABLE CAPITAL ADEQUACY RATIO
The purpose of this research is to analyze the influence of the variables Loan to Deposit Ratio (LDR), Interest Rate (IR), and Capital Adequacy Ratio (CAR) on the profitability of Return on Assets (ROA) using the intervening variable CAR. This is based on the phenomenon of inconsistencies in various previous studies, thus encouraging researchers to do it again. This type of research is quantitative descriptive with multiple regression analysis method of panel data using 20 cross section samples and 5 year time series. This research formula is to maximize the ROA value through the intervening variable CAR with the research object of banking sector companies on the Indonesia Stock Exchange. Two research models were developed and integrated into one research model with model selection test stages, Chow Test, Hausman Test, and Lagrange Multiplier Test. Results from the first research model; that IR can explain the influence on CAR with a positive correlation where these results confirm the applicable theory. The results of the second research model show that IR and CAR can significantly explain their influence on ROA with a positive correlation and these results also confirm the applicable theory, besides that the intervening variable CAR is only able to mediate the influence of IR on ROA. The other variables cannot explain their influence on the endogenous variable CAR in the first model and ROA in the second model. It is hoped that these results can help as a guide for banking practitioners in Indonesia to maximize ROA profitability.
Loan to Deposit Ratio, Interest Rate, Capital Adequacy Ratio, Return on Assets.