Equity financing rate Ho

Sources: - Journal “the performance of Malaysian Islamic Bank During 1984- 1997: an exploratory study” by Abdus Samad and M. Kabir Hasan - Journal “Determinants of Islamic Banking Profitability” by M. Kabir Hasan and Abdel Hamed M. Bashir.

5. Hypothesis Planning Data Analysis

In doing analysis, the writer through the following steps: a. Collecting data, which related with interrelated variables such as customer and short term funding over total assets, equity financing rate, and profitability. Determining the value of interrelated variables match with determined formula from previous data that already collected. b. Doing statistic testing to test hypothesis and also interpret and make analysis over the result of hypothesis testing. c. Making summary according to the result of statistic testing. Hypothesis determination Simultaneously: Ho 1 : µ = 0 there are no significant influence happened simultaneously between customer and short term funding over total assets and equity financing rate over Islamic bank profitability Ha 1 : µ ≠ 0 there are significant influence happened simultaneously between customer and short term funding over total assets and equity financing rate over Islamic bank profitability Partially: 1. Customer and Short Term Funding over Total Assets Ho 2: β = 0 There are no significant influence happened partially to customer and short term funding over total assets over Islamic bank profitability. Ho 2: β ≠ 0 there are significant influence happened partially to customer and short term funding over total assets over Islamic bank profitability.

2. Equity financing rate Ho

3 β = 0 There are no significant influence happened partially to equity financing rate over Islamic Bank profitability. Ho 3 β ≠ 0 There are significant influence happened partially to equity financing rate over Islamic bank profitability. The steps on hypothesis testing in regression and correlation analysis are: 1. Normality Test Normality test is done to knowing whether or not each variable distributes normally. 2. Multiple Regression Linear Analysis Regression analysis is used to predict the value of variable Y based on the value of variable X and also the changing prediction on variable Y for every changing unit of variable X. the equation form of this multiple regression linear is: Y = α + β 1 + β 2 X2 + ε Where: Y = Profitability Return on Assets X 1 = Customer and short Term Funding over Total Assets X 2 = Equity Financing rate Mudharabah- Musyarakah ratio α = Constantan, is dependent value, which in this matter is Y when the independent variable is 0 X 1 ,X 2 =0 β 1 = Multiple regression coefficient between independent variable X 1 over dependent variable Y, if the independent variable X 2 , and considered constant. β 2 = Multiple regression coefficient between independent variable X 2 over dependent variable Y, if dependent variable X 1 , and considered constant. Regression Classic Assumption test a. Multicolinearity Test b. Autocorrelation Test c. Heteroscedacity Test F Test In testing regression model which explain the relation form and influence between independent variable over dependent variable, F which can be formulated as follows. − − = k k n F 1 − R R 1 2 Where: R 2 = Determination Coefficient n = Sample Measure k = Amount of independent variable Value F from the result of previous counting then to be compared to F table which is gained by using risk rank 5 and degree of numerator and denominator namely VI = k and V2 – n=k=1 by using following criteria: If F counting F table thus Ho is rejected If F counting F table thus Ho is accepted If the acceptance of Ho takes place it can be meant that multiple regression model is significant which makes result that the influence of independent variables are also simultaneously insignificant to the dependen variable. t Test to test influence of dependent variables partially to independent variables. It uses regression coefficient partially test, namely by comparing If t table and t counting which can be formulated as following: t=R xi rx k n 1 1 − − − Each t results of this counting then to be compared to t table which is gained using real level 0,005. Criteria which is used as a comparison basic is following: Hypothesis test uses 2 parties partially, with criteria: Ho is accepted if : -t 12 α t t 12α Ho is rejected if : t -t 12 α t t 12 α Result and Discussion Customer and short term funding over total assets is a ratio between the amount of Customer and short term funding namely the fund of member or third party which consist with the amount of giro wadiah, mudharabah saving, and mudharabah deposit; with total assets or total a total assets owned by Bank Syariah Mandiri. Table 5 Customer and short term funding over total assets In Thousand Rupiah Year CSTFT Total Assets CSTFTA 1999 2000 2001 2002 2003 2004 2005 54.323.717 176.950.813 474.599.494 1.125.315.048 2.695.886.154 5.881.755.705 7.201.711.676 447.985.127 607.555.113 933.864.151 1.622.303.491 3.422.313.267 6.869.949.266 8.272.965.277 0,121262323 0,291250636 0,508210422 0,693652608 0,787737955 0,856157080 0,870511532 Level of Equity Financing Mudharabah-Musyarakah Ratio Level of equity financing or cost level of sharing profit by using proxy of Mudharabah-Musyarakah ratio MMF illustrate the amount of Mudharabah – musyarakah cost skim or cost of sharing profit equity financing to the total of amount of cost which is given. The component of this ratio is kind of the amount of mudharabah and musyarakah also the total amount of cost which is gained from the financial report of Bank Syariah Mandiri. Profitability Return Assets So profitability uses the ratio of Return On Assets ROA is kind of ratio between profit after tax or net profit with total assets total activa which is owned by Bank Syariah Mandiri. This ratio is used to measure the ability of bank management in obtaining the profit totally through managing the asset which is owed by bank. Table 6 Mudharabah – Musyarakah Ratio In thousand Rupiah Year Mudharabah Musyarakah Total Financing MMF 1999 2000 2001 2002 2003 2004 2005 54.323.717 176.950.813 474.599.494 1.125.315.048 2.695.886.154 5.881.755.705 7.201.711.676 1.665.000 15.331.594 32.980.735 44.451.994 283.381.084 767.144.124 1.206.011.780 38.410.014 315.728.293 653.133.877 1.140.980.782 2.169.422.166 5.295.656.006 5.847.822.344 0,073808877 0,053671737 0,054404979 0,040887625 0,155862041 0,201180988 0,290477952 So Profitability uses the ratio of Return on Assets ROA is kind of ratio between profit after tax or net profit with total assets total activa which is owned by Bank Syariah Mandiri. This ratio is used to measure the ability of bank management in obtaining the profit totally through managing asset which is owed by the bank. From the early processing data which is resulted values obtained from independent variables and dependent variables of research as presented in the table 8. the values of those variables will be processed further by using the support of software SPSS 13.0 in order to answer the identified problem. Table 7 Return on Assets In thousand Rupiah Year Profit After Tax Total Assets ROA 1999 2000 2001 2002 2003 2004 2005 0,121262323 0,291250636 0,508210422 0,693652608 0,787737955 0,856157080 0,870511532 0,073808877 0,053671737 0,054404979 0,040887625 0,155862041 0,201180988 0,2904477952 0,000383725 0,015701257 0,017886553 0,018588156 0,004679964 0,015057878 0,010131709 Table 8 Value of Research Variables Year CSTFTA MMF ROA 1999 2000 2001 2002 2003 2004 2005 0,121262323 0,291250636 0,508210422 0,693652608 0,787737955 0,856157080 0,870511532 0,073808877 0,053671737 0,054404979 0,040887625 0,155862041 0,201180988 0,290477952 0,000383125 0,015701275 0,017886553 0,018588156 0,004679964 0,015057878 0,010131709 Description of Research Result At the below is presented the result of Descriptive statistic of processing the variables processing is gained by assisting SPSS 13.0. Table 9 Regression coefficient Model Unstandardized coefficient Standardized coefficient t Sig B Std. Error 1. constant cstfta mmf .006 023 -.061 004 008 .024 1.085 -.920 1.624 2.980 -.2.527 .180 .041 .065 Analysis of double linear regression From the above table 9, it is obviously can be seen that the functional relation between customer and short term funding over total assets with return on assets ROA is in versely proportional whereas the relation between the level of equity financing and ROA is inversely proportional. It means, every increasing which takes place at CSTFTA will be followed the increasing of ROA bank, and every increasing the level of equity financing will be followed by the decreasing of ROA bank and vise versa. Dependent Variable: roa For BSM: Y=0,006+0,023X 1 .-.061X 2 + Σ Where Y= Profitability Return on AssetsROA X 1 = Customer and Short Term Funding over Total Assets CSTFA X 2 = Level of Equity Financing mudharah- musyarakah Financing RatioMMF Coefficient of Correlation and Multiple Determination In a research on the relation between dependent variables and independent variables, some powers of X 1 , X 2 which together explain the change of Y are often wanted to be known. Determination coefficient R can be seen through the result of counting by using SPSS 13.0. at the below: Table 10 Summary Model Model R R Square Adjusted R Square Std. Error of the Estimate Dustin – Watson 1 .838a .702 .553 004185603930 2.218 Then obtained that F table is 6.94. the summary of hypothesis 1 testing result is as follows: Table 11 F Test Result Model Summary Anova b Model Sum of Square Df Mean Square F Sig. Regression Residual Total .000 .000 .000 2 4 6 .000 .000 4.714 .089 a a. Predictors: constant, mmf, cstftfa b. Dependent Variables: roa Table 12 t Test Result Coefficient Model Unstandardized Coefficient Standardized Coefficient t Sig B Std. Error Beta constant cstfta mmf .006 .023 -.061 .004 .008 .024 1.085 -.920 1.624 2.980 -2.527 .180 .041 -.065 From table above can be obtained that F count is 4.714 while F table is 6.94. so, Ho to test the existence of this double linear regression is an acceptance area. Ho for significant rate 5, it means the influence and relation between independent variables simultaneously Customer and Short Term Funding over Total Assets and Equity Financing Rate Mudharabah – Musyarakah Ratio with dependent variables is non- significant profitability Return on Assets. t Test Partially testing is done to knowing the existence of relation or influence one of independent variable with dependent variable with assumption that the other variables are constant. The test result with helps from SPSS 13.0. can be seen on the following table 12. In testing this hypothesis, the criteria which can be used is a criteria where: Ho is accepted when: -t 12 t count -t 12 . Ho is rejected when: t count -t 12 or t count t 12 with df = n-k-1 = 7-2-1 = 4 then the obtained t table is 2.7764. from table 4.10, can be known that value of t count for Customer and Short Term Funding over Total Assets is 2.980 an for equity financing rate Mudharabah- Musyarakah Ratio is - 2.527. since 2.980 2.7764 or t count t 12 , so Ho is in the rejection area, it means that the relation and the influence happened between variable Customer and Short Term Funding over Total Assets with Return in Assets is significant. Meanwhile, -2.527 -2.77642.527or -t 12 t count t 12 , so Ho is in the acceptance area, it means that the relation and influence happened between variable Equity Financing Rate with Return on Assets is non-significant. Conclusion and Suggestions Conclusion From the research that has been done and also explained on the previous chapters, can be concluded as follows:

1. The result of hypothesis test simultaneously between Customer and Short