The purpose of this study to determine the positive effect of debt financing and equity
financing on profit expense ratio. This research is a quantitative research and use data in the
form of secondary data. The research was conducted within a period of five years is
2011-2015. Sampling selection method in this research is purposive sampling with criteria (1)
Islamic Banks listed in the Indonesia Stock Exchange operates at 2011-2015, (2) The Islamic
Banks listed in the Indonesia Stock Exchange published the annual financial statements
continued for the period 2011-2015, (3) Publish annual financial statements that provide the
necessary data regarding the variables of research. Sample in this study is 8 Islamic Banks
for 5 years, so the amount of data that is used 40. Data analysis techniques used in the study
is multiple linear regression analysis equipped with the classical assumption of normality,
multicollinearity, autocorrelation, heteroscedasticity. The conclusion of this study is debt
financing did not negatively affect profit expense ratio. While equity financing was not
positive effect on profit expense ratio.
Key words : Debt financing, Equity financing, Profit expense ratio, Islamic bank
