Effect of Debt to Equity Ratio and Efficiency on Return on Equity in Defense Sector Companies

Akhmad Firmansyah Buhroni(1), Ivan Yulivan(2), Lukman Yudho Prakoso(3),


(1) Universitas Pertahanan Republik Indonesia
(2) Universitas Pertahanan Republik Indonesia
(3) Universitas Pertahanan Republik Indonesia
Corresponding Author

Abstract


Indonesia is a country that has so many islands, that's why Indonesia is often called a maritime country. In the Law of the Republic of Indonesia No. 16 of 2012 concerning the Defense Industry it is given to companies in the defense industry immediately, but rather a set of regulations, terms and conditions that must first be fulfilled by companies in the Defense Industry. The success of a company can be seen from the level of ROE or (Return On Equity). However, the Defense Sector Company's net profit from 2011-2020 is still relatively small. This study uses a quantitative approach. The samples used in this study were 3 companies including PT Dirgantara Indonesia, PT PAL Indonesia and PT Pindad with a period of 10 years. The results of this study indicate that DER has a negative effect on ROE, efficiency has a positive effect on ROE, and the magnitude of the influence of Debt To Equity Ratio (DER) and Efficiency on Return On Equity in defense sector companies is 66.3% and the remaining 33.7% is explained by the variable others that were not examined in this study.


Keywords


Debt to Equity Ratio, Efficiency, Return on Equity, Defense Sector Companies

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DOI: 10.57235/jambuair.v2i1.368

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