The Influence of The Difference of Accounting Profit and Book-Tax Differences toward Profit Growth (An Empirical Study of Pharmaceutical Companies Listed on Indonesia Stock Exchange, Year 2010-2014)

Abstract

Profit is an indicator of the performance of companies which contains important information to assist stakeholders in making investment decisions. Profit growth is proxies of persistence and the quality of profit that can be affected by the box-tax differences which consist of permanent and temporary difference. The purpose of this research is to analyze the influence of temporary difference and permanent difference variables toward and the profit growth in pharmaceutical companies. The research populations are 10 pharmaceutical companies which listed on the Indonesia Stock Exchange, while research samples are 9 companies annual report from 2010-2014. The sampling process was done by using purposive sampling method. This research uses secondary data such as annual report. The method used is quantitative descriptive with multiple regression analysis. The result of this research shows that permanent difference has no significant effect on profit growth, while temporary difference has significant effect on profit growth. The temporary difference owns a significant influence toward the profit growth with positive direction. Statically, the variable of book-tax differences or the temporary difference and the permanent difference collaboratively influences the profit growth.