The Effect of IRR and CAR on Profit Growth in Companies Listed on the Indonesia Stock Exchange (IDX)

This study is motivated by the importance of profit growth as an indicator of financial performance in banking companies listed on the Indonesia Stock Exchange. Profit growth reflects a bank’s ability to maintain financial stability, manage risk, and strengthen the confidence of investors and the public. This study aims to analyze the effect of the Interest Risk Ratio (IRR) and Capital Adequacy Ratio (CAR) on profit growth in banking companies listed on the Indonesia Stock Exchange during the 2021–2023 period. This research applies a descriptive quantitative approach using secondary data obtained from company financial statements published on the official website of the Indonesia Stock Exchange and the official websites of the respective banking companies. The population of this study consists of 33 banking companies, while the sample was selected using purposive sampling, resulting in 16 companies with 48 observations. The data analysis technique used is multiple linear regression with the assistance of SPSS 22. The results show that, partially, IRR has a significant effect on profit growth with a significance value of 0.033 < 0.05, and CAR has a significant effect on profit growth with a significance value of 0.000 < 0.05. Simultaneously, IRR and CAR significantly affect profit growth with a significance value of 0.006 < 0.05. The R Square value of 0.346 indicates that IRR and CAR explain 34.6% of the variation in profit growth, while the remaining percentage is influenced by other variables outside this study.