The Role of Institutional Ownership on the Determinants of Profitability
Corresponding Author(s) : Eny Maryanti
Prosiding International Conference on Sustainable Innovation (ICoSI),
Vol. 3 No. 2 (2023)
Abstract
Introduction – The company's profitability is the company's ability to generate net profit from activities company in generating net income from activities carried out in the accounting period. Factors that affect profitability have inconsistent results, therefore in this study we add institutional ownership as a moderating variable. Purpose – This study aims to determine the factors that affect profitability with institutional ownership as a moderating variable in consumer goods industry companies listed on the Indonesia Stock Exchange in 2017-2019. Methodology/Approach – The population of this study is the consumer goods industry companies listed on the Indonesia Stock Exchange in 2017-2019, totaling 114 companies. The number of research samples is 42 companies. This study uses the SmartPLS 3 (Partial Least Square) data analysis test. Findings – The results of this study indicate that institutional ownership as a moderating potential for the relationship of cash turnover to profitability, receivables to profitability, and the relationship of liquidity to profitability. Originality/ Value/ Implication – This study uses institutional ownership as a pure moderator which strengthens the relationship of inventory turnover to profitability significantly.
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