Using Current Ratio Indicator and Total Asset Turnover Approach in Solving Return on Assets Problems with Debt-to-Equity Ratio Moderated

Abstract

The discussion leads to the effect of Current Ratio and Total Assets Turn Over on Return On Assets which shows the dissimilarity of results in previous studies. Therefore, this study aims to determine the effect of Current Ratio and Total Assets Turn Over on Return On Assets. This study uses the object of the food and beverage sector companies on the Southeast Asian Stock Exchange for the 2014-2020 period. The data collected is secondary data with the documentation method in the form of the company's annual report. The analytical tool used to test the hypothesis is SPSS version 22. The sampling method used in this study used a purposive sampling technique and obtained 18 companies with a sample of 126 samples. The analysis technique used is multiple linear regression analysis, partial test, simultaneous test and moderate regression (MRA). The results partially conclude that the Current Ratio has a significant negative effect on Return On Assets and Total Assets Turn Over has a significant positive effect on Return On Assets. The results of the study simultaneously showed that the Fcount value was 4.864 and Ftable 3.07, meaning that Fcount > Ftable or a significant value of 0.009 0.05. Thus, the Current Ratio and Total Assets Turn Over simultaneously have a significant effect on Return On Assets. In the moderating regression test, it can be concluded that the Debt to Equity Ratio can moderately weaken the relationship between the influence of the Current Ratio on Return On Assets. And the Debt to Equity Ratio cannot moderate the relationship between Total Assets Turn Over and Return On Assets.