The Influence of Sales Growth and Leverage on Profitability Empirical Study of Manufacturing Companies in the Consumer Goods Sector Listed On Indonesia Stock Exchange for the 2016-2019 Period

Abstract

This research aims to examine the effect of sales growth and leverage on profitability (Return on Assets) in consumer goods manufacturing companies listed on the Indonesian Stock Exchange (BEI). The factors tested in this research are sales growth and leverage as independent variables, whereas, profitability is the dependent variable. The research method used in this research is descriptive and verificative method. The population in this research were 53 companies in the consumer goods sector, and the sampling technique used in this research is purposive sampling with the following criteria: companies that did IPO before 2016, did not publish financial reports for 4 consecutive years and did not experience any losses during the 2016-2019 period. The sample data used in this research were the financial reports with a sample size of 27 companies, while the analysis method used in this research is panel data regression analysis at a significance level of 5%. The program used in analyzing the data was Eviews 10. The results showed that sales growth had a significant positive effect on profitability (Return on Assets), while the Debt to Asset Ratio (DAR) had no effect on avoidance of profitability.