Profitability Indicators Effects on Earning Response Coefficient in Manufacturing Sector

Abstract

This research examines profitability indicators' impacts on the earning response coefficient in the food and beverage manufacturing subsector. Utilizing purposive sampling methodology, 12 companies listed on the Indonesia Stock Exchange between 2020-2023 were selected, generating 48 observations. Secondary data underwent analysis through the SPSS version 26 application employing descriptive statistics, classical assumption tests, multiple linear regression, and hypothesis testing. Empirical findings reveal Return on Asset and Net Profit Margin demonstrate insignificant effects, while Return on Equity exhibits negative significant influence on Earning Response Coefficient. Collectively, profitability indicators explain 55.7% of the variance in the earning response coefficient, with the remaining 44.3% attributed to unexamined factors.