ANALYSIS OF THE EFFECT OF DEBT ON NET PROFIT AT PT LIPPO KARAWACI TBK

Abstract

This study aims to analyze the effect of debt on net income at PT Lippo Karawaci Tbk during the period 2020-2024. The background of this study stems from the importance of a balanced funding structure in maintaining the stability and profitability of companies, especially in the property sector, which is highly susceptible to financial fluctuations. The method used is a quantitative approach with simple linear regression analysis to test the relationship between debt levels and net profit. The results show that debt has a negative effect on net profit, but it is not statistically significant, with a regression coefficient value of -2.707 and a significance of 0.094 (> 0.05). The coefficient of determination (R²) value of 0.661 indicates that 66.1% of net profit variation is influenced by debt, while the rest is influenced by other factors. These findings indicate that an increase in debt tends to suppress profitability, but efficient management can reduce this negative impact. This study is expected to serve as a reference for companies in designing optimal and sustainable capital structure strategies.