Impact of Liquidity, Profitability, and Solvency Ratios on Dividend Per Share: A Panel Data Analysis of Mining Companies Listed on the Jakarta Islamic Index

Abstract

The mining sector has unique characteristics in terms of capital structure and dividend distribution. Companies in this sector often face challenges such as fluctuations in commodity prices, large capital investment needs, and high operational risks. The purpose of this study was to determine the partial or simultaneous effect of the liquidity ratio, namely Quick Ratio, profitability ratio, namely Net Profit Margin and solvency ratio, namely Debt to Equity Ratio on Dividend Per Share in mining sector companies listed on the Jakarta Islamic Index (JII) for the period 2013-2022. This research uses a quantitative approach with panel data regression analysis techniques. Secondary data is collected from annual financial reports on the official website of each mining sector company listed on the Jakarta Islamic Index. The analysis steps used are classical assumption test, best model selection test, hypothesis testing and determination coefficient test. The results stated that the best model was the Fixed Effect Model with details of the liquidity ratio, namely the Quick Ratio and the solvency ratio, namely the Debt to Equity Ratio partially had no significant effect on Dividend Per Share. The profitability ratio, namely Net Profit Margin, partially has a positive and significant effect on Dividend Per Share. Simultaneously Quick Ratio, Net Profit Margin and Debt to Equity Ratio have a significant effect on Dividend Per Share with a coefficient of determination of 81.32% while the remaining 18.68% is explained by variations in other variables not examined. The implication of this research is that investors and companies can make Net Profit Margin as one of the important indicators in considering investment decisions or in making policies related to Dividend Per Share.