DEBT TO EQUITY RATIO TO RETURN ON ASSETS AT PT. SUPARMA TBK. PERIOD 2017-2024

Abstract

This research is driven by the significance by the importance of capital structure management in improving company profitability, particularly at PT. Suparma TBK, a paper manufacturing company in Indonesia. The objective of this study is to examine the impact of the Debt to Equity Ratio (DER) on Return on Assets (ROA) during the period 2017-2024. A quantitative approach was used, employing simple linear regression analysis based on the company's quarterly financial data. The results show that DER has a negative relationship and no significant effect on ROA, with a regression coefficient of 0.040 and a p-value of 0.178, which is greater than the significance level of 0.05. The R2 value of 5.96% indicates that DER contributes 5.96% of the variation in ROA. In conclusion, an increase in DER tends to decrease ROA, so companies need to remain cautious in managing their capital structure, but also need to focus on other factors that have a more dominant influence on profitability, such as operational efficiency, asset turnover and cost control in order to improve overall financial performance.