Factors Influencing Profit Growth in Basic and Chemical Industry Companies

Abstract

This research examines and analyzes the influence of Net Profit Margin (NPM), Total Asset Turnover (TATO), and Current Ratio (CR) on profit growth among companies in the basic materials and chemical sectors listed on the Indonesia Stock Exchange. The sample selection employed purposive sampling from 74 companies, resulting in 32 samples that satisfied the research criteria. The independent variables comprise NPM, TATO, and CR, while the dependent variable is profit growth. Partial testing results (t-test) reveal that NPM exerts a positive and significant influence on profit growth, whereas TATO and CR demonstrate positive but insignificant effects. Simultaneous testing results (F-test) indicate that NPM, TATO, and CR collectively exert a significant influence on profit growth. The Coefficient of Determination Test (R²) yields a value of 0.103, or 10.3%, signifying that NPM, TATO, and CR explain 10.3% of the variance in profit growth, while the remaining 89.7% is attributable to other variables outside the research model.