Abstract
This study aims to determine the effect of Debt Financing and Equity Financing on the Profit Expense Ratio. The population in this study is Sharia Commercial Banks registered in Bank Indonesia from 2011 to 2018 as many as 11 banks while the sample is determined by the purposive sampling method and meets the criteria of 2 companies. The analytical method used is multiple linear regression models. This method is also called quantitative because the research data is in the form of numbers and analysis using statistics. Regression analysis results obtained an f-value of 4.155 which means that simultaneously has a significant effect on the profit expense ratio. Partial test results with the t-test showed that debt financing was obtained t-value 1,803> t table 1,687 and significant 0.009 <0.05. then it can be said that debt financing has a significant effect on the profit expense ratio. For equity financing obtained t-value 2.913> t table 1.687 and significant 0.045 <0.05. then it can be said that equity financing has a significant effect on the profit expense ratio.
Highlights
One of the goals of a company or banking is to get profits in maintaining the growth cycle of a company
This study aims to determine the effect of Debt Financing and Equity Financing on the Profit Expense Ratio
Effect of Debt Financing based on hypothesis testing can be concluded that debt financing affects the profit expense ratio can be seen from the results of the t-value of 1,803 and comparing with t-table of 1,687 or (1,803> 1,687) it can be concluded that debt financing influences to profit expense ratio
Summary
One of the goals of a company or banking is to get profits in maintaining the growth cycle of a company. Islamic banks have many advantages because they are based on sharia, so transactions and activities are halal, but the character of sharia banks are open, so they do not specialize in Muslim customers, and for non-Muslims. This proves that Islamic banks open up equal opportunities to all customers and do not differentiate between customers. Based on scientific studies that the banking system without interest does not impact the economic crisis. To run a business that is by Islamic law, Islamic banking seeks to offer products that are free from usury
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