EFFECT OF DEBT RATIO, LONG-TERM DEBT TO EQUITY, AND FIRM SIZE ON PROFITABILITY

Abstract

This study aims to determine and analyze the effect of the debt ratio, long-term debt to equity, and firm size on profitability measured by Return on Equity (ROE). The object of this research is the Hotel and Tourism Sub-Sector Companies listed in IDX in 2015-2020. The financial ratios used in this study as independent variables are debt ratio, long-term debt to equity, and firm size. The data used is annual data, based on annual financial reports, starting from 2015 to 2020. The data used in this study is the panel data method with the help of Eviews 9 software. The result of this research is that long-term debt has a positive effect on profitability. Meanwhile, debt ratio and firm size hurt ROE and simultaneously have a significant effect on ROE. However, only long-term debt and debt ratio partially have a significant effect on ROE, while firm size does not significantly affect the ROE.