Analysis of Factors Affecting Financial Performance of Property and Real Estate Companies Listed on the Indonesia Stock Exchange

International Journal of Research and Scientific Innovation (IJRSI) | Volume IX, Issue II, February 2022 | ISSN 2321–2705

Analysis of Factors Affecting Financial Performance of Property and Real Estate Companies Listed on the Indonesia Stock Exchange

Yuliah¹, Leni Triana ², Rina Nopianti^3
1,²Management Department, Bina Bangsa University,
³Accounting Department, Bina Bangsa University

Abstract : An study into the financial performance of property and real estate firms that are publicly traded on the Indonesian Stock Exchange from 2016 to 2020 was conducted. There have been a number of previous financial performance studies. In order to re-examine the theory of financial performance, additional study is required. A total of 52 property and real estate companies participated in the survey. Purposive sampling was used to collect data from 29 sample companies over a five-year period (2016-2020), resulting in 145 observations. The information for this study came from a list of firms that could be found on the website of the Indonesian Stock Exchange. The data is analyzed through the use of multiple regression analysis. Following the traditional assumption test, multiple regression analysis and hypothesis testing are performed, respectively. Financial performance is influenced by a number of factors, including capital structure, firm size, and total asset turnover. The capital structure has a significant negative impact on the financial success of a company. The size of a company has minimal impact on its financial performance, but the overall amount of assets it has does.

Keywords: Financial Performance, Total Asset Turnover, Capital Structure, Firm Size

I.INTRODUCTION

Financial performance is a company’s financial information within a certain period of time as an achievement of the company’s success in managing finances. Information about financial performance can assist investors in making good decisions. ROA is used as an indicator used to assess the company’s performance. ROA is used to measure the effectiveness of the company in determining profits. ROA whose value increases indicates that the company’s performance is better.
There are several factors that affect financial performance, namely capital structure, Firm Size and total asset turnover. The first factor that is thought to affect financial performance is the capital structure. Capital structure is a comparison between the amount of long-term debt and the company’s own capital. In funding the company’s activities, the company must be able to combine things that can provide profits from debt capital [1]. This situation reflects capital that is properly regulated in accordance with long-term debt and share capital. The capital structure proxied by Debt to Equity can boost the company’s profits and the shareholders will also earn profits.

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