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Effect of Capital Adequacy Ratio and Activity Ratio on Non-Performing Loan with Company Size as Moderating Variable

Year: 2025

Type: article

Abstract: The study analyzes the impact of the capital adequacy ratio (CAR) and business activity indicators on the level of non-performing loans (NPL) in Indonesian food industry companies (2019-2022). A quantitative method and path analysis in SmartPLS 4 were used. CAR and activity do not have a significant impact on NPL. Instead, the size of the company has a direct and positive impact on the level of non-performing debt. It was found that the size of the enterprise does not act as a moderator for CAR and activity indicators (P-Value > 0.05). For food industry management, the key factor in credit risk is the size of the company, while capitalization and activity were found to be secondary during this period.

Source: Economic journal Odessa polytechnic university

DOI: 10.5281/zenodo.18067508

Authors: Lim, Jessica, Siregar, Robert Tua, Lie, Darwin, Romy, Elly

Institution: Universitas Prima Indonesia

Language: English

Topic: Banking stability, regulation, efficiency

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: diamond

OpenAlex ID: W7117428706

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