JEFMS Journal

ABSTRACT:

Profitability has an important meaning in an effort to maintain the continuity of the company, because profitability shows whether the business entity has good prospects in the future. Based on data obtained in the annual reports of Rural Banks (BPR) throughout Denpasar City, the profitability of BPRs over the last six years has decreased significantly. The formulation of the research problem is how is the effect of the Capital Adequacy Ratio and Loan to Deposit Ratio moderated by Company Size on Profitability in BPRs throughout the City of Denpasar? This study uses a quantitative descriptive approach with secondary data sources. The research population is all BPRs in Denpasar City, totaling 22 units. Determination of the sample using purposive sampling in order to obtain 20 BPR units as a sample and 120 observational data. The research instrument uses documentation techniques or non-participant observation. Methods of data analysis using descriptive analysis and inferential analysis with moderation or moderated regression analysis The results of the study show that the Capital Adequacy Ratio has no effect on Return on Assets. Loan to Deposit Ratio has a positive and significant effect on Return on Assets. Company size is not able to moderate the effect of Capital Adequacy Ratio on Return on Assets. Company size is able to moderate the effect of Loan to Deposit Ratio on Return on Assets. The implication of the research is that this research provides information for BPRs throughout Denpasar City regarding the effect of Capital Adequacy Ratio and Loan to Deposit Ratio on Return on Assets which is moderated by Firm Size so that BPR management throughout Denpasar City can determine future policy directions in order to increase profitability and progress BPR in Denpasar City.

KEYWORDS:

Return on Asset, Capital Adequacy Ratio, Loan to Deposit Ratio, Company Size

REFERENCES:

1) Abdulkabir, S. A. (2020). Influence of Internal Factors on the Financial Performances: An Empirical Study on Nigerian Deposit Money Banks. Journal of Economics, Finance and Management Studies, 03(12). doi: 10.47191/jefms/v3-i12-01

2) Adeosun, L. P. K., & Ganiyu, R. A. (2013). Corporate Reputation as a Strategic Asset. International Journal of Business and Social Science, 4(2), 220-225.

3) Ali, A. (2021). Profitability variations and disparity in automobile sector: A case of leading Indian Automobile companies. Accounting, 7(6), 1455-1462. doi: 10.5267/j.ac.2021.3.019

4) Alnassar, W. I., & Chin, O. B. (2015). Why Banks Use Credit Derivatives? Review Paper. Procedia Economics and Finance, 26, 566-574. doi: 10.1016/s2212-5671(15)00956-9

5) Asamoah, R. O., Baiden, B. K., Nani, G., & Kissi, E. (2020). Identifying intangible resources to enhance profitability strategies of Small-Medium Scale Construction Firms (SMSCFs) in developing countries. International Journal of Construction Management, 1-8. doi: 10.1080/15623599.2020.1774835

6) Ashill, N. J., Rod, M., & Gibbs, T. (2015). Coping with stress: A study of retail banking service workers in Russia. Journal of Retailing and Consumer Services, 23, 58-69. doi: 10.1016/j.jretconser.2014.12.006

7) Barman-Adhikari, A., & Rice, E. (2014). Social networks as the context for understanding employment services utilization among homeless youth. Eval Program Plann, 45, 90-101. doi: 10.1016/j.evalprogplan.2014.03.005

8) Chatterjee, A., & Kulakli, A. (2015). An Empirical Investigation of the Relationship Between Emotional Intelligence, Transactional and Transformational Leadership Styles in Banking Sector. Procedia - Social and Behavioral Sciences, 210, 291-300. doi: 10.1016/j.sbspro.2015.11.369

9) David, P., Anxo, C., & Manel, A. (2015). On informational efficiency of the banking sector: a behavioral model of the credit boom. Studies in Economics and Finance, 32(2), 158-180. doi: 10.1108/SEF-04-2013-0050

10) Gönül, Ö. Ö., Tüzün, İ. K., & Gökoğlu, M. M. (2013). The Impact of External Social Capital on Human Resource Management Practices. International Journal of Human Resource Studies, 3(4), 27. doi: 10.5296/ijhrs.v3i4.4366

11) Inkinen, H. (2015). Review of empirical research on intellectual capital and firm performance. Journal of Intellectual Capital, 16(3), 518-565. doi: doi:10.1108/JIC-01-2015-0002

12) Jui-Min, H. (2012). EXPLORING THE EFFECTS OF SALESPERSON COMPETENCIES ON PERFORMANCE: CASE STUDY OF A FORD CAR DEALER IN TAIWAN. Pakistan Journal of Statistics, 28, 607-615.

13) Kadioglu, E., Telceken, N., & Ocal, N. (2017). Effect of the Asset Quality on the Bank Profitability. International Journal of Economics and Finance, 9(7), 60. doi: 10.5539/ijef.v9n7p60

14) Kim, H. K., & Lee, C. W. (2021). Relationships among Healthcare Digitalization, Social Capital, and Supply Chain Performance in the Healthcare Manufacturing Industry. Int J Environ Res Public Health, 18(4). doi: 10.3390/ijerph18041417

15) Kim, S. B., & Kim, D. Y. (2016). The influence of corporate social responsibility, ability, reputation, and transparency on hotel customer loyalty in the U.S.: a gender-based approach. Springerplus, 5(1), 1537. doi: 10.1186/s40064-016-3220-3

16) Kor, B. (2016). The mediating effects of self-leadership on perceived entrepreneurial orientation and innovative work behavior in the banking sector. Springerplus, 5(1), 1829. doi: 10.1186/s40064-016-3556-8

17) Nicholas, P., Jayanath, A., & Zahirul, H. (2018). Rationality, accounting and benchmarking water businesses: An analysis of measurement challenges. International Journal of Public Sector Management, 31(3), 290-315. doi: 10.1108/IJPSM-04-2017-0124

18) Pitchayadol, P., Hoonsopon, D., Chandrachai, A., & Triukose, S. (2018). Innovativeness in Thai family SMEs: An exploratory case study. Journal of Small Business Strategy, 28(1), 38-48.

19) Rachim, R., Riadi, S. S., Paminto, A., Defung, F., Suharto, R. B., & Setini, M. (2021). Financial services authority on profitability with external factors as moderating variables at regional development banks in Indonesia. Accounting, 7(6), 1445-1454. doi: 10.5267/j.ac.2021.3.020

20) Raj Sharma, V., Kumar Sanu, S., Verma, K., & Rajput, S. (2022). Dimensions of Sustainable Tourism Management: A Case Study of Alwar City, Rajasthan, India. GeoJournal of Tourism and Geosites, 41(2), 335-342. doi: 10.30892/gtg.41201-835

21) Smith, C. (2017). An Analysis Of Structural Social Capital And The Individual’s Intention To Share Tacit Knowledge Using Reasoned Action Theory. Journal of Applied Business Research, 33(3), 475-488. doi: http://dx.doi.org/10.19030/jabr.v33i3.9940

22) Still, K., Huhtamäki, J., & Russell, M. (2013, 2013/10/Oct 2013). Relational Capital and Social Capital: One or two Fields of Research?, Kidmore End.

23) Terra, F. (2023). Bank lending and expectations Elgar Encyclopedia of Post-Keynesian Economics (pp. 19-20): Edward Elgar Publishing Limited

24) Vlasov, M., & Kachan, Y. (2021). Influence of digital economy factors on the development of human capital in the regions of Russia. 16th European Conference on Innovation and ….

25) Yasir, M., & Majid, A. (2017). Impact of knowledge management enablers on knowledge sharing. World Journal of Entrepreneurship, Management and Sustainable Development, 13(1), 16-33.

26) Zhang, Z., Wang, X., & Chun, D. (2022). The Effect of Knowledge Sharing on Ambidextrous Innovation: Triadic Intellectual Capital as a Mediator. Journal of Open Innovation: Technology, Market, and Complexity, 8(1), 25. doi: 10.3390/joitmc8010025

27) Zheng, C. (2022). An innovative MS-VAR model with integrated financial knowledge for measuring the impact of stock market bubbles on financial security. Journal of Innovation & Knowledge, 7(3), 100207. doi: 10.1016/j.jik.2022.100207