Citation:

Leman Mulyana, Ani Yunita Yusuf. "The Effect of Capital Adequacy Ratio on Return on Assets of Banking Companies Listed on the Indonesia Stock Exchange, 2022-2024" International Research Journal of Economics and Management Studies, Vol. 5, No. 8, pp. 125-128, 2026. Crossref. https://doi.org/10.56472/25835238/IRJEMS-V5I8P112

Abstract:

This study examines the influence of Capital Adequacy Ratio (CAR) on Return on Assets (ROA) among banking companies listed on the Indonesia Stock Exchange during 2022–2024. This study applies a descriptive quantitative research design with an explanatory approach using secondary data from annual financial statements. The purposive sampling method was used to select 35 banking companies from a population of 43 banks, resulting in 105 firm-year observations. Data analysis was conducted using descriptive statistics and simple linear regression. The results indicate that CAR has a negative and statistically significant relationship with ROA (B = -0.053; p = 0.017). The regression model explains 5.4% of the variation in ROA, indicating that other factors contribute substantially to banking profitability. These findings suggest that higher capital adequacy does not automatically lead to higher profitability, highlighting the importance of effective capital utilization and other financial performance determinants.

References:

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Keywords:

Banking Companies, Capital Adequacy Ratio, Indonesia Stock Exchange, Return on Assets.