THE EFFECT OF LEVERAGE, ACTIVITY RATIO, SALES GROWTH AND CAPITAL STRUCTURE ON THE PROFITABILITY OF COMPANIES IN THE AUTOMOTIVE AND COMPONENT SUB-SECTOR LISTED ON THE INDONESIA STOCK EXCHANGE FOR THE PERIOD 2019-2022

Abstract

The objectives of this research are: 1) To determine the effect of leverage on profitability, 2) To find out the effect of activity ratios on profitability, 3) To find out the effect of sales growth on profitability, 4) To find out the effect of capital structure on profitability, 5) To find out the effect leverage, activity ratio, sales growth and capital structure to profitability. The population in this study was 13 automotive and component sub-sector companies listed on the IDX and the sampling technique was carried out using purportive sampling. Based on the predetermined criteria, 12 companies were obtained. The data analysis technique uses multiple linear regression methods with the SPSS 26 program. The results of this study show that leverage has an effect on profitability with a significant value of 0.015, a value smaller than 0.05, the activity ratio has no effect on profitability with a significant value of 0.057, a value greater than 0.05, sales growth influences profitability with a significant value of 0.000, the value is smaller than 0.05, capital structure influences profitability with a significant value of 0.000, the value is smaller than 0.05, leverage, activity ratio, sales growth and capital structure simultaneous effect on profitability with a significant value of 0.000.