The Effect of Debt on Net Profit in Chemical Sub-Sector Companies Listed on the Indonesian Stock Exchange for the 2018 - 2021 Period

Abstract

The objective of this study is to examine the impact of long-term and short-term debt on the net profit of chemical sub-sector firms that are publicly traded on the Indonesia Stock Exchange (BEI) during the period of 2019-2023. This study employs quantitative approaches and utilizes secondary data sources, specifically company financial reports acquired from the official IDX website. Classical assumption testing, multiple regression testing, and hypothesis testing facilitated by SPSS software are the methods employed for data analysis. The research findings indicate that neither long-term nor short-term debt significantly impacts the net profit of the organization. This may occur due to variations in the manner and conditions of debt repayment, both of which impact the firm's cost of capital and the degree of risk involved. Concurrently, both long-term and short-term debt exert a substantial and favorable impact on the net profit of the organization. This demonstrates that corporations have the ability to increase their profits by utilizing debt as a funding source.