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presented in the form of logarithms, because the value and its spread is large compared to other variables.
The measurement with using the formula:
3. Profitability
According to Jordan et al. 2010:61, profitability is intended to measure how efficiently a firm uses its assets and manages its operation.
The focus in this group is on the bottom line, net income. Empirical evidence of study of Gao and Joshi 2009, Janggu et al.
2007, Mohamed Zain Janggu 2006 cited in Al-Haj et al. 2011 and Siregar and Sitepu 2009 find the results provides strong evidence that the
corporate social reporting is positively related to companies’ profitability.
This indicates that, the bigger, in terms of size a company is, the more the
company discloses its social and environmental information.
In this study, profitability is measured by ratio scale and researcher use return on assets ROE to measure the profitability variable. According
to Ross, et al. 2006:65, ROE is measure of how the stockholders fared during the year, because benefiting shareholders is our goal, ROE is, in an
accounting sense, the true bottom-line measure of performance.
Size= Total Assets of Company Size= Log Total Assets of Company
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The measurement with using the formula:
4. Leverage
Leverage ratio is usually also called solvency ratio. According to Ross et al
. 2006:60, leverage is intended to address the firm’s long-run ability to meet its obligations.
Jensen and Meckling 1976 cited in Darwis 2009:55, Janggu et al. 2007:11 and Reverte 2008:387 argue that more highly leverage
firms disclose voluntary information in order to reduce their agency costs and, as a result, their cost of capital.
Thus, empirical evidence of Trotman and Bradley 1981 cited in Janggu et al. 2007:11 show that positive relationship has been found
between financial leverage and the extent of CSR reporting. In this study, researcher use debt to equity ratio DER. According
to Kasmir 2012:157, debt to equity ratio is a ratio used to assess the debt to equity. This ratio is useful to know the amount of funds provided by
creditors with the owner of the company and also provides a general indication of the companys financial viability and risk.
Formula for calculating leverage DER is as follows:
ROE
=
Debt to Equity Ratio DER
=
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5. CSR Reporting
