The Effect of Capital Adequacy Ratio (CAR) and Liquidity on Profitability of Islamic Commercial Banks in Indonesia for the 2016-2020 Period

Abstract

This study aims to determine how the Effect of Capital Adequacy Ratio (CAR) and Liquidity on the Profitability of Islamic Commercial Banks in Indonesia for the 2016-2020 period. The results of data processing using the SPSS 17 For Windows program resulted in multiple regression analysis with two independent variables and one dependent variable showing that Y = 2.108 + 1.380CAR + 0.158CR, meaning that profitability is influenced by the Capital Adequacy Ratio (CAR) and Liquidity. Furthermore, the results show that the Capital Adequacy Ratio (CAR) and Liquidity variables can explain the Profitability variable 41%, the remaining 58% is explained by other variables. The results of the hypothesis test state that: Hypothesis 1 is accepted, this can be seen from the value of tcount > ttable, therefore the Capital Adequacy Ratio (CAR) has an effect on profitability. The second hypothesis is rejected, it can be seen from the value of tcount < ttable, it is stated partially that Liquidity has no effect on Profitability. Hypothesis 3 is accepted, it can be seen from the value of Fcount > Ftable, it is stated simultaneously that Capital Adequacy Ratio (CAR) and Liquidity have an effect on Profitability.