The Impact of Profitability and Solvency on the Financial Performance of Telecommunications Companies (An Applied Study on LTT Telecommunications and Technology Company for the Period 2005-2023)

Abstract

This study aims to identify, analyze, and describe the extent of the simultaneous and partial impact of profitability and solvency on financial performance. The independent variables in the study are profitability, measured by Net Profit Margin (NPM), and solvency, measured by the Debt-to-Equity Ratio (DER), while the dependent variable is financial performance, measured by Return on Assets (ROA). The findings reveal that profitability exerts a significant effect on financial performance (p-value = 0.001), whereas solvency does not have a statistically significant effect on financial performance (p-value = 0.749). When both variables were analyzed simultaneously, the results indicated that profitability and solvency collectively exert a significant influence on financial performance (p-value = 0.002)