Key result
Gross profit margin, debt-to-equity ratio, and exchange rate correlate with higher RAROC, moderated by COVID-19.
Why the study?
This study aimed to explore the determinants of RAROC moderated by risk.
Observational
p-value: p=<0.01
In the Indonesian manufacturing industry, gross profit margin, debt-to-equity ratio, and exchange rate positively influence RAROC, with COVID-19 acting as a moderating variable.
May guide RAROC strategies in Indonesian manufacturing; leaves open generalizability and causal effects beyond this setting.
This paper aims to explore determinants of RAROC moderated by Risk. This research used Model Panel Data to estimate variable relationship and yearly data for manufacturing Industry. The result is that The Ratio of Gross Profit margin is positively effect on RAROC. Debt to Equity Ratio has positively an effect on RAROC. Exchange Rate has positively an effect on RAROC. Interreaction DER dan COVID-19 has negatively an influence on RAROC. Interreaction Exchange Rate dan COVID-19 has negatively an influence on RAROC. COVID-19 is a pure moderating variable in this research for relationship between Exchange Rate and DER on RAROC.
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Manurung et al. (2024) conducted an observational in Manufacturing industry financial performance. Gross Profit Margin, Debt to Equity Ratio, and Exchange Rate was evaluated on Risk Adjusted Return on Capital (RAROC) (p=<0.01). Gross Profit Margin, Debt to Equity Ratio, and Exchange Rate positively affected Risk Adjusted Return on Capital, with COVID-19 acting as a pure moderating variable.
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