The purpose of this paper was to investigate the influence of debt on profitability of firms listed on Indonesian Stock Exchange. Multiple regression analysis was used in the study in estimating the relationship between debt and firm performance. This study also used three of accounting-based measures and one of market-based measure of financial performance i.e. return on equity (ROE), return on assets (ROA),Â gross profit margin (GPM), and Tobinâ€™s Q). Based on a sample of non-financial Indonesian firms listed from 2006 to 2010 the results revealed that debt had a negative impact on firmâ€™s performance. The result showed that industry of Hotel and Travel, and Construction was susceptible to use debt.
Copyrights © 2014