The Influence of Current Ratio & Debt To Equity Ratio on Return Of Equity at Bank BTPN for the Period 2013 - 2023

Fitra Nadira; Elia  Putri; Shela Difa  Fusfita; Nurwita Nurwita

Authors

Fitra Nadira Management Study Program, Faculty of Economics and Business, Pamulang University
Elia Putri Management Study Program, Faculty of Economics and Business, Pamulang University
Shela Difa Fusfita Management Study Program, Faculty of Economics and Business, Pamulang University
Nurwita Management Study Program, Faculty of Economics and Business, Pamulang University

Keywords:

Current Ratio, Debt to Equity Ratio, Return on Equity, Liquidity, Capital Structure, Bank BTPN

Abstract

This study examines the effect of Current Ratio (CR) and Debt to Equity Ratio (DER) on Return on Equity (ROE) at PT Bank BTPN Tbk during the 2013 to 2023 period. The study addresses the need to understand how liquidity and capital structure shape banking profitability in a competitive and regulated financial sector. A quantitative explanatory approach was applied using secondary data obtained from Bank BTPN’s published annual financial reports. The data were analyzed through classical assumption tests and multiple linear regression with SPSS Version 26. The normality, multicollinearity, heteroscedasticity, and autocorrelation tests indicate that the regression model meets the required statistical assumptions. The findings show that CR has a positive but insignificant effect on ROE, indicating that short-term liquidity does not directly increase shareholder returns. This suggests that liquidity functions mainly as a financial safety mechanism rather than a direct driver of profitability. In contrast, DER has a positive and significant effect on ROE, showing that capital structure plays a stronger role in explaining Bank BTPN’s profitability. The simultaneous test confirms that CR and DER jointly have a significant effect on ROE, with an R Square value of 0.870. These results imply that Bank BTPN’s profitability depends not only on maintaining liquidity, but also on optimizing the productive use of debt and equity. The study concludes that capital structure management is central to improving ROE, while liquidity must support operational stability and income-generating activities. These findings provide evidence for bank managers, investors, and future financial ratio studies in Indonesia.

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