July 24, 2025

Hybrid Modeling of Financial Ratios and Profitability: A Panel Regression and Random Forest Approach on LQ45 Firms in Indonesia

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Authors

BPBill J.C Pangayow JSJunita Bumbu Silele MKMaylen K. P. Kambuaya

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Implication

Hybrid approach combines panel regression and random forest to analyze profitability in LQ45 firms, indicating key financial ratios influence performance.

Key Points

The study reveals that net profit margin, total asset turnover, and debt to asset ratio positively impact return on assets in firms.
A fixed-effect panel regression model explains 96% of ROA variation, showcasing the importance of these financial ratios.
The random forest model predicts return on assets with an R² of 0.8246, highlighting the relevance of asset productivity metrics.
Findings suggest business managers should prioritize margins and efficiency, aiding investment and regulatory decision-making.

Cite This Study

Pangayow et al. (2025) studied this question.

synapsesocial.com/papers/689a0627e6551bb0af8cdf18 https://doi.org/10.21203/rs.3.rs-7131169/v1

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Implication

Hybrid approach combines panel regression and random forest to analyze profitability in LQ45 firms, indicating key financial ratios influence performance.

Hybrid Modeling of Financial Ratios and Profitability: A Panel Regression and Random Forest Approach on LQ45 Firms in Indonesia

Discussion

Member takes

Implication

Key Points

Cite This Study

Hybrid Modeling of Financial Ratios and Profitability: A Panel Regression and Random Forest Approach on LQ45 Firms in Indonesia

Discussion

Member takes

Implication

Key Points

Cite This Study

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