Abstract
This research is motivated by a decrease in profitability in several companies over the last few years. The purpose of this study is to determine the effect of intellectual capital on the decline in profitability of banking companies over the past few years. This study has two types of variables consisting of dependent variables namely intellectual capital whose indicators are (VACA, VAHU, and STVA), while the independent variable is profitability whose indicators are represented by (ROE) in the 2013-2017 period. The results of this study indicate simultaneously VACA, VAHU, and STVA have an influence on company ROE. Partially VACA, and STVA have a significant influence on company ROE. Whereas VAHU has a negative influence on company ROE. 29.3% of all variables in this research model namely VACA, VAHU, and STVA have a contribution to affect profitability (ROE)
Highlights
Each bank produces different profits, the size of the profit generated by a bank can be influenced by several factors
VACA, VAHU, and STVA have an influence on the dependent variable namely return on equity (ROE) of BUMN banks, as evidenced by the calculated F value greater than the F table value
The influence of all independent variables proves that Value Added Capiptal with VACA, VAHU, and STVA components has the main goal of creating added value in knowing the size of physcal capital and intellectual potential
Summary
Normally shown in the statement of financial position and all intangible assets (trademarks, patents and brands) that modern accounting methods consider including all members' knowledge and practicing their knowledge. Intellectual Capital is basically difficult to understand, but once discovered and exploited it is likely to provide an organization with new resources to compete and win (Roos et al, 1997., Bontis, 1996). The combination of the three value added in Intellectual Capital is symbolized by the name VAIC which consists of several indicators namely VACA, VAHU, and STVA developed by Pulic (1998: 1999: 2000). While profitability is measured using the ratio of return on equity (ROE), ROE shows the company's ability to generate profits after tax using the company's own capital. According to Kasmir (2018) ROE ratio can show the amount of net profit generated and company productivity using loan capital or own capital
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