Factor Affecting Profitability: Evidence of Animal Feed Sub Sector in Indonesia from Year (2016-2017)

Abstract

It is the purpose of every company to gain profit, however, in 2015 there is an indication that economy is slowing down that affecting the whole word including animal feed subsector companies in Indonesia which beg the question what is the condition of the company in the succeeding in 2016 and 2017. This study aims to analyze the factor affecting the profitability of animal feed companies listed Indonesian Stock Exchange. The study is quantitative using four companies listed at animal feed sub-sector listed from the year 2016-2017 at Indonesian Stock Exchange. The method used in this research is descriptive method, using Current Ratio for liquidity and Debt to Asset from solvability and Return on asset for profitability ratio of animal feed four companies namely, Charoen Pokphand Indonesia Tbk (CPIN), Japfa Comfeed Indonesia Tbk (JPFA), Malindo Feedmill Tbk (MAIN), and Sierra Produce Tbk (SIPD). Data analysis is done using descriptive analysis, significance test, correlation test, and regression analysis. The results showed that in terms of descriptive statistic animal feed companies has a good level of liquidity above 1 and have a debt level above the set standard of 30%. In terms of profitability, animal feed companies have good average financial ratio meaning that companies utilize assets owned efficiently to obtain profit maximally. However, the result shows that there is no significant relationship between solvability and liquidity toward profitability at animal feed companies form the year 2016-2017 at 5% and 10% significant level. Thus, the study suggests for future study to expand the sample of the study in term of year of sample and similar companies in different countries or region