The Effect of Islamic Financial Ratio of Profitability

Abstract

This study aims to determine the influence of Islamic income ratio, profit sharing financing ratio, profit sharing funding ratio and zakat performance ratio to the profitability of Islamic bank in Indonesia. This study uses model of multiple linear regression hypothesis test data panel. The population in this study is 12 Islamic bank which listed in Bank of Indonesia (BI) year 2013-2016. The sample in this study based on purposive sampling technique, selected 8 Islamic bank in Indonesia that publish annual financial statements in 2013-2016. Data used in this study is secondary data form. The study results proved: (1) Islamic income ratios significantly influence profitability Islamic bank in Indonesia; (2) Profit Sharing Financing Ratio significantly influences the profitability of Islamic bank in Indonesia; (3) Profit Sharing Funding Ratio not significantly affects the profitability of Islamic bank in Indonesia and (4) Zakat Performance Ratio no significant effect to the health of Islamic bank in Indonesia. Keywords-islamic finance ratio; islamic bankIn the sampling using the technique of purposive sampling with the following characteristics: 1) Banks that have gone public, 2) Has published its financial reports to the Financial

Performance Index and Operating Ratio: Effects Islamic on Sharia Profitability in Indonesia

“…Profit sharing ratio was found to have a significant positive effect on ROA in previous studies by (Bustamam & Aditia, 2016;Nurmawati et al, 2020;Nasution et al, 2018;Putri & Gunawan, 2019;Siswanti et al, 2021;Felaifah & Sunarsih, 2018). Islamic income ratio was found to have a significant positive effect on ROA in a previous study by (Azzahra, 2020;Dahlifah & Sunarsih, 2018;Putri & Gunawan, 2019;Rahmani, et al, 2020;Siswanti et al, 2021). This is different from the research of Khasanah (2016) and Rahmawati et al (2020) rusy who found IsIR did not have significant effect and PSR had a significant negative effect.…”

“…This is related to the sharia income ratio, which is income earned according to sharia principles, and is a form of obedience or accountability to Allah SWT. Since the sharia income ratio is thought to be equivalent to the net interest margin in traditional banks, an increase in the sharia income ratio could lead to greater profitability (Dahlifah & Sunarsih, 2018). So islamic income ratio has a significant positive effect on profitability (ROA).…”