IDEAS home Printed from https://ideas.repec.org/a/prv/pssjpv/2233.html

Examining financial ratios as drivers of profit growth in Indonesian property and real estate companies

Author

Listed:
  • Indah Ramadhani

    (Department of Management, Faculty of Economics, Universitas Asahan)

  • Zulfa Khairina Batubara

    (Universitas Asahan)

Abstract

Profit growth is a central input to investor assessment of firm prospects, yet evidence on which financial ratios predict it in Indonesia's property and real estate sector remains inconsistent. This study examines the partial and simultaneous effects of the debt to asset ratio (DAR), total asset turnover (TATO), and net profit margin (NPM) on profit growth. Purposive sampling of firms listed on the Indonesia Stock Exchange yielded 17 companies over 2021–2024, giving 68 firm-year observations analysed by pooled ordinary least squares. The model was significant, F (3, 64) = 4.60, p = .006, explaining 17.8% of the variance in profit growth (adjusted R ² = .139). NPM was the only significant partial predictor, B = 2.264, SE = 0.838, t (64) = 2.70, p = .009, while DAR, p = .570, and TATO, p = .136, were not. Three robustness analyses conducted on the same data materially qualify this conclusion. Winsorising profit growth at the 5th and 95th percentiles reduces NPM to marginal significance ( p = .052) and renders TATO significant ( p = .033); removing a single extreme observation renders both NPM ( p = .166) and the overall model ( p = .118) non-significant; and a firm fixed effects specification, the appropriate estimator for panel data, produces a stronger NPM coefficient ( B = 4.704, p

Suggested Citation

  • Indah Ramadhani & Zulfa Khairina Batubara, 2026. "Examining financial ratios as drivers of profit growth in Indonesian property and real estate companies," Priviet Social Sciences Journal, Privietlab Research Center, vol. 6(9), pages 68-82, September.
    • Handle: RePEc:prv:pssjpv:2233
    DOI: 10.55942/pssj.v6i9.2233
    as

    Download full text from publisher

    File URL: https://journal.privietlab.org/download.php?id=13551
    Download Restriction: no
    File URL: https://libkey.io/10.55942/pssj.v6i9.2233?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:prv:pssjpv:2233. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mochammad Fahlevi (email available below). General contact details of provider: https://journal.privietlab.org/index.php/PSSJ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.