Pengetian Profitabilitas Keuangan

Profitability is a performance indicator that is carried out by management in managing the company's assets indicated by profit

generated. Profitability ratios associated with sales and investment companies because these two variables show the effectiveness of the company's overall operations.

In general, investors are very concerned about profitability ratios, for example, to see the benefits to be received in the form of dividends. In addition, analysis of the profitability of an evaluation of the rate of return on the investment company which focuses on the analysis of the company's resources and the level of profitability, involving measurement of profitability which triggers margin and turnover.

Some measurements in calculating the profitability ratios:

1) net profit on sales (net profit margin / NPM)

This ratio measures the company's ability to generate profits through sales. How to calculate the NPM is to compare the net profit by net sales.
Net profit margin net bersihPenjualan Profit =
According to Kashmir (2008: 201) states that the company is said to be good if NPM owned by the company above the industry average that is generally above 20%.

2) return on total assets (return on total assets / ROA)

Return on total assets is calculated by dividing net income before interest and taxes to total average assets. This ratio assesses the effectiveness and intensity of assets in generating profits.
Totalrata assets ROA-ratapajakdan sebelumbersih interest Profit =
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According to Kashmir (2008: 203), the industry average for ROA is 30%. The company said to be good if it is able to achieve ROA above the industry average.

3) return on total equity (return on total equity / ROE)

Return on total equity is calculated by dividing net income by average shareholders' equity. This ratio is used to demonstrate the ability of their own capital in generating profits available for shareholders.
Totalrata-ratabersih equity ROE Profit =
According to the company Kashmir said to be good if the ROE is owned by the company above the industry average that is generally above 40% (Cashmere, 2008: 205)
In this study, researchers used the ratio of net profit after tax to net sales (net profit margin / NPM) because this ratio indicates that earnings related to the sale. NPM can be interpreted as the level of efficiency of the company, namely the extent to which the ability of the company to reduce costs in the company. The higher the NPM, the more effective a company to run its operations. Almilia (2007: 5), stating that "high net profit margin indicates a company's ability to generate profits are high on certain sales levels, or high costs on certain sales levels".
Companies that generate profits (profitable) high also will produce a broader disclosure on its financial statements. It is
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due to the company's management wants to ensure that the company in a strong competitive position and shows a good performance management. In addition, management also wants to convince the investors and creditors that the company's operations are run efficiently.