The Influence of Current Ratio, Debt to Equity Ratio, and Operating Expenses on Return on Equity Study on Raw Material Producing Companies in the Plantation Sub-Sector Listed on the IDX Period 2018 – 2023

Abstract

Profitability reflects a company's performance in generating profits and serves as an indicator of its financial condition. This study aims to determine the effect of Current Ratio (CR), Debt to Equity Ratio (DER), and Operational Expenses on Return on Equity (ROE) in plantation subsector companies listed on the Indonesia Stock Exchange (IDX) for the 2018-2023 period. The study uses a quantitative method with a population of 6 plantation companies listed on the IDX, selected using a purposive saturated sampling method, and financial statement data processed using SPSS version 25. The t-test results show that, partially, the Current Ratio positively and significantly affects ROE (tcount 2.497 > ttable 1.976; p = 0.03 < 0.05). The Debt-to-Equity Ratio negatively and significantly affects ROE (tcount -2.009 > -1.976; p = 0.001 < 0.05). Operational Expenses negatively but not significantly affect ROE (tcount -1.888 < -1.976; p = 0.061 > 0.05). The F-test results indicate that, simultaneously, CR, DER, and Operational Expenses significantly affect ROE (Fcount 2.993 > Ftable 2.44; p = 0.021 < 0.05). In conclusion, there is a partial and simultaneous effect of CR, DER, and Operational Expenses on ROE in plantation companies listed on the IDX during the 2018-2023 period.