The Analysis of the Relationship Between Financial Policy and Profitability of Service Group on the Stock Exchange of Thailand

Abstract

The purpose of this research was to examine the relationship between the Financial Policy and the Profitability of Service Groups on the Stock Exchange of Thailand. It is quantitative research. Collects information from the annual report of the service Groups at companies listed on the Stock Exchange of Thailand, the sample chosen will select only companies with complete financial statements and complete 5 years, the period used for analysis is from 2017 to 2021, totaling 105 companies, a total of 525 data. The statistics utilized in the analysis information include descriptive statistics and inferential statistics in Pearson correlation coefficient analysis and Multiple linear regression analysis at the significance level of 0.05. And this research aims to examine 5 ratios utilized in the analysis, namely 1) Debt to Equity Ratio (D/E) 2) Debt to Total Assets Ratio (D/R) 3) Net Profit Margin (NPM) 4) Return on Assets (ROA) 5) Return on Equity (ROE). The results showed that The Debt to Total Assets (D/R) is correlated with Net Profit Margin (NPM), Return on Assets (ROA), and Return on Equity (ROE), with a significant correlation statistically significant at 0.05 in the opposite direction. The debt-to-equity ratio (D/E) is not correlated with the Profitability Ratio and does not meet the assumptions set.