Abstract :
This research is designed to investigate whether banking industry
financial ratio changes have a correlation to the earning changes in the future.
There are 5 banking industry financial ratios that was taken from CAMEL.
(Capital, Assets, Management, Earning and Liquidity) factor, such as CAR
(Capital Adequacy Ratio), NPL (Non Performing Loan), ROA (Return on Assets).
BOPO (Operating Expense to Operating Income) and LDR (Loan to Deposit
Ratio). Data in this reseach are annual report of 105 commercial bank in
Indonesia from 2002 to 2006.
To examine the correlation of banking industry financial ratios changes to
the earning changes in the future, this research used multiple regression analysis.
The result of this research shows that BOPO changes has a significance
correlation to the earning changes in 1 year a head and ROA changes also has a
significance correlation to the earning changes in 2 years a head, but for earning
changes in 3 years ahead, none of banking industry financial ratio have
correlation.
Keywords : Financial Ratio, Earnings changes, CAMEL