Analysis Of The Effect Of Debt To Equity Ratio (DER) On Return On Equity (ROE) In Indonesian  Telecommunication Companies

Firda Yanti; Aris Mundar; Hanifah  Muthiah

doi:10.63922/ijebir.v5i03.3479

Firda Yanti Study Program of Management, Sekolah Tinggi Ilmu Ekonomi (STIE) Bima
Aris Mundar Study Program of Management, Sekolah Tinggi Ilmu Ekonomi (STIE) Bima
Hanifah Muthiah Study Program of Management, Sekolah Tinggi Ilmu Ekonomi (STIE) Bima

DOI: https://doi.org/10.63922/ijebir.v5i03.3479

Keywords: Debt to Equity Ratio, Return on Equity.

Abstract

This research examines the effect of Debt to Equity Ratio (DER) on Return on Equity (ROE) in Indonesian telecommunication subsector companies listed on the Indonesia Stock Exchange (BEI) during 2019-2024. Using purposive sampling, the study selected 5 companies (TLKM, ISAT, EXCL, TOWR, BTEL) yielding 30 observations. Simple linear regression analysis was conducted using SPSS version 22. The statistical hypotheses are: H0: μ₁ = 0 (no effect) vs Ha: μ₁ ≠ 0 (significant effect). Results show DER has a positive and significant effect on ROE (t = 4.491, p = 0.000 < 0.05), with regression coefficient β = 0.513 and R² = 41.9%. This indicates optimal debt usage enhances profitability through financial leverage. The findings contribute to capital structure theory in Indonesia's telecom sector amid digital transformation.

References

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