FINANCIAL RATIO ANALYSIS OF BANK PERFORMANCE


 
 
This study aims to determine the effect of Firm Size proxied with SIZE), Credit Risk proxied by Non Performing Loans (NPL), and Capital Adequacy proxied with Capital Adequacy Ratio (CAR) toward Bank Performance proxied by Return on Asset (ROA). Population in this study are banking companies listed in Indonesia Stock Exchange (IDX) 2015-2017. The technique of determination of the sample using the method of purposive sampling and obtained 27 banking companies with a research period of three years to obtain 81 units of samples. Data analysis was done using Microsoft Excel 2010 and hypothesis testing in this research using Data Panel Regression Analysis with the E-Views 9.0 program and a significance level of 5%. The results of the research shows that (1) Firm Size (SIZE) has a significant positive effect on Bank Performance (ROA), (2) Credit Risk (NPL) has a negative and significant effect on Bank Performance (ROA), (3) Capital Adequacy (CAR) has no effect and significant on Bank Performance (ROA). 
 
 



INTRODUCTION
In line with the progress of civilization, information technology, globalization, up to the international economy, the role of banks is growing and the field of business is increasingly widespread.
The bank is one of the most dynamic companies that can drive the growth of the national economy. Bank performance is used as a form of the bank's ability to measure the effectiveness of a company in generating profits, the greater the profit, the better financial performance is shown. As for other factors that affect bank performance, namely the size of the company. Company size is a fairly complex problem, this is because banks are considered to have a potential economy if the bank has the ability to manage the total assets it has. That is, if the company has a large total assets, management will be easier to use the assets that are in the company so they can control the company.
However, companies must also be able to manage their assets so as not to incur greater costs that can affect profitability. In addition, the bank in carrying out its operations is certainly not free from a variety of risks. The bank's business risk is uncertainty that will occur in the future. The risk that will be faced by banks is the number of loans that are not paid or cannot be collected from customers, in other words, called bad credit or problem loans. The last factor that can affect bank performance in this study is capital adequacy, the strength of this aspect of capital adequacy can be a major source of financing for bank activities and as a buffer for possible losses.

Profitability
The main objective of the company is to achieve maximum profit or profit as much as possible as a form of success or failure of the company in the acquisition of profits to be given to parties who have a direct relationship with the company.
Sitanggang (2014, p. 28) says that earning profit is the company's acquisition ability seen from which profit and capital are taken into account. While Muhammad Yusuf (2017) states that profitability is the ability of a company to earn profits in a certain period.
To measure the level of profit, profitability ratios are used. According to Harahap (2013, p. 304) 'Profitability ratio or also called profitability describes the ability of a company to earn profits 2019 FEB UPNVJT. All rights reserved through all capabilities, and existing resources such as sales activities, cash, capital, number of employees, number of branches, etc.' Report on company performance good will improve bank performance which can be measured by the level of profitability of the company. This is supported by previous research conducted by Muhammad Yusuf (2017).
Based on the explanation above about Profitability, it can be concluded that Profitability is the company's ability to obtain profits or profits in using the resources owned by the company such as assets, capital and debt.

Firm Size
Haryanto & Hutasoit (2016) states that the size of a bank is seen from the total assets owned by the bank. The greater the value of assets owned by the bank indicates that the size of the bank is getting bigger. Assets owned by banks are in the form of savings, time deposits, demand deposits, time deposits, bills on other banks, securities, loans, and equity.
The size of the company in its measurement is measured by transforming the total assets of the company into natural logarithms. Among them according to Hartono (2013, p. 460) the size of the company is proxied by using the Natural Total Asset Log with the aim of reducing excessive data fluctuations. By using natural logs, the number of assets with a value of hundreds of billions or even trillions will be simplified, without changing the proportion of the actual assets.

Credit Risk
According to Law No.10 year 1998 concerning the amendment to Law No. 7 of 1992 said that credit is the provision of money or bills that can be equated, and this is based on a loan agreement between the bank and another party that requires the borrowing party to repay the debt after a certain period of time with interest. However, in credit activities, there are elements of time, risk, income, surrender, trust and approval.
According to Pandia (2012, p. 199), states "Risk is a threat or the possibility of an action or event that has an impact that is opposite to the goal to be achieved '. Then, based on the theories that have been mentioned, it can be concluded that the risk can be a threat or opportunity for the company depending on how the response and actions provided by the company.
However, in analyzing the risks that will be faced, the bank conducts credit classification into two categories, namely non-problematic loans and problem loans (Ismail, 2010. p. 123).
Non-performing loans will have a negative impact because they will cause losses to the Bank itself.
The losses suffered by the Bank itself are in the form of no return of previously channeled funds and unearned interest income. That is, the Bank will lose the opportunity to earn interest, which results in a total decrease in income.

Capital Adequacy
According to Muhammad (2008, p.

161) alan
Capital is a picture of the bank's ability to meet capital adequacy '.

RESEARCH METHOD
The population that will be used as objects in this study are banking companies listed on the