Operational Efficiency, Capital Adequacy, and Asset Turnover Effects on Return on Equity

Abstract

This research examines operational efficiency, capital adequacy, and asset turnover's impact on return on equity in the Indonesian banking sector. Utilizing purposive sampling methodology, 28 banking companies listed on the Indonesia Stock Exchange during 2019-2023 were selected from a 47-company population. Secondary data underwent analysis through the SPSS version 26 application. Empirical findings reveal that operational efficiency and capital adequacy have negative significant effects, while asset turnover has aitive significant influence on return on equity. Collectively, these variables explain 78.0% variance in return on equity, with the remaining 22.0% attributed to unexamined factors.