Effects of Intellectual Capital Performance on Companys Financial

Performance: An Empirical Study on Financial Sector Non-Banking

Companies Listed in Indonesia Stock Exchange
Asniati*
Accounting Department, Andalas University
asniati.bahari@gmail.com

Rendra Septiano
Accounting Department, Andalas University
rendraseptiano@gmail.com
ABSTRACT
Intellectual Capital is one of the approaches that can be used to measure knowledge assets. Many studies
found out that intellectual capital has a positive correlation with financial performance. The objective of
this research is to find out the correlation of intellectual capital performance to company financial
performance of financial sector non-banking companies in Indonesia. In this study, the Intellectual capital
performance was measured by using Value Added Intellectual Coefficient (VAIC) method and Companys
Financial Performance was measured by using Return on Assets (ROA) and Net Profit Margin (NPM).
VAIC used Value Added of Physical Capital (VACA), Value Added of Human Capital (VAHU) and Value
Added of Structural Capital (STVA) as the research indicators. This research was conducted to Financial
Sector Non-Banking Companies Listed in Indonesia Stock Exchange from 2011-2013. There were 126
companies used for the research population. However, only 99 companies fulfilled the criteria to be
included in the analysis as research sample. This research found out that VACA, VAHU and Intellectual
capital have positive correlation to ROA. However, STVA does not have correlation to ROA. VAHU and
Intellectual capital have positive correlation to NPM but do not have correlation to VACA and STVA.
Findings of this research can serve as a guideline for financial sector non-banking company managers to
manage their intellectual capital as well as to improve or reassess their companys financial performance.
The findings also contribute to the knowledge and application of Financial Accounting and Financial
Management.
Keywords: Value Added Intellectual Coefficient, Value Added of Physical Capital (VACA), Value
f=Added of Human Capital (VAHU) and Value Added of Structural Capital (STVA), and
Financial Performance.
1. Introduction
Background
Recently, the condition of world economic has been developing. It is proven by an improvement
of information technology, tight competition and growth of innovation. Those factors are creating a high
frequency of product traffic as the impact of world free trade. It makes many businessmen change their
business paradigm from labour based business become knowledge based business. Knowledge business
paradigm will transform knowledge into company revenue.

The business environment has changed from industrial era become new economic era on strategy
and creation of company value. Innovation, information system, organization management and resources
based become the priority for the basic equity of company to compete in market (Ni Made and Ni Putu,
2012) and these factors are also known as knowledge assets. One of the approaches that can be used to
evaluate and measure the knowledge assets is intellectual capital. Intellectual capital is known by many
science subjects such as; management, information technology, sociology and also accounting (Sunarsih
and Mendra 2012).
Intellectual capital (IC) is the part of intangible asset that use as an instrument for determining
company value. Intellectual Capital is also known as specific and valuable knowledge that is owned by
organization (Fajri, 2012). Creation of company value makes the traditional accounting become not
suitable in making decision by stakeholder because of the limitation in identifying and measuring
organizations intellectual capital. Traditional accounting cannot identify and measure the intangible assets
for Knowledge Base Company. Knowledge based company believed that knowledge will be raised as the
most basic source of wealth in human societies in the new era. The Implementation of an effective strategy
for knowledge management and becoming a knowledge-based organization as two necessary conditions
for the success of organizations are under the conditions let them enter a historical and knowledge-based
economy era (Beshkooh, 2013). It makes an accountant should understand how to identify, measure and
disclose the intangible assets in financial statement.
Knowledge Base Company is a business that depends on the quality of their employee. Azizi et al
(2013) explain knowledge-based business environment requires an approach that embeds new intangible
assets of organization such as knowledge and qualifications of human resources, innovation, and relation
with costumers, organization culture, systems, and organizational structure. It means knowledge Base
Company prefers to decrease the amount that will be spent in physical capital, and then allocate it to
employees soft skill improvement. So, the allocation in improving employees soft skill is known as
intellectual capital.

Pulic (1998) find an indirect measurement of intellectual capital and also the efficiency of
intellectual capital by using Value Added Intellectual Coefficient - VAIC tm. The main components of VAIC
consist of Physical Capital (VACA Value Added Capital Employed), Human Capital (VAHU Value
Added Human Capital) and Structural Capital (STVA Structural Capital Value Added). Physical Capital
is all of non-current assets own by company, such as land, building and equipment. Human Capital is the
source of innovation and company strategy from employees personal skill to make the company more
efficient. Structural capital is an indicator that interprets the efficiency of structural capital (Firer and
William, 2003). VAIC model has been applied in many banking sectors around the world and each of
these applications is proving the applicability, affectivity and credibility of VAIC in measuring intellectual
capital efficiency (Abdulsalam et al, 2010). Most of other research that measures the intellectual capital is
focusing on banking sector. Banking sector is not the only sector which measure of intellectual capital but
what about others financial institution such as, Insurance Company, Securities Company, Finance
Company and Other Financial Company?
There is a lack of research in measuring intellectual capital for non-Banking sector, so further
research needed. For this purpose the title for this research will be Effect of Intellectual Capital
Performance On Companys Financial Performance: Empirical Study in Financial Sector NonBanking Companies Listed in Indonesia Stock Exchange.

2. Theoretical Framework
Intellectual Capital
Abdulsalam et al (2010) define intellectual capital of a company consist of all employees, their
organization, and their ability to create value, which is evaluated at the market. Related to that, quoted from
Mojtahedi and Ashrafipour (2013), Intellectual capital is the group of knowledge assets that are attributed
to an organization and most significantly contribute to an improved competitive position of this
organization by adding value to defined key stakeholders.

Then Sunarsih and Mendra (2012) explain intellectual capital is an approach to evaluate and
measure knowledge assets which become a focus in many subject such as, management, information
technology, sociology and accounting. Where Steward (1997) stated: IC is collective brainpower or
packaged useful knowledge, consisting of intellectual material knowledge, information, intellectual
property, experience that can be put to use to create wealth.
Intellectual capital is the new production system in mainly driven by technology, knowledge,
expertise and relations with stakeholders which may collectively. The possession of knowledge, applied
experience, organizational technology, customer relations and professional skills that provide a company
with a competitive edge in the market is describe by Ahangar (2010) as intellectual capital. Then Cabrita
and Bontis (2008) explained intellectual capital is a matter of creating and supporting connectivity
between all sets of expertise, experience and competences inside and outside the organization. Intellectual
capital is a phenomenon of interactions and complementarities, meaning that a resources productivity
may improve through the investments in other resources.
From an accounting perspective, intellectual capital can be inferred as the difference between book
value and market value of firms. Then, Al-Shubiri (2013) explained Intellectual capital was not just a part
of human brainpower but goes beyond that to the assets that can be identified and optimal use in
organization.
Pulic (1998) then classify intellectual capital into three main component; 1) Physical Capital, 2)
Human Capital, and 3) Structural Capital.
Physical Capital
Physical Capital is an asset that has a physical form and not owned by the company are used
efficiently and optimally in the company's operations to the creation of added value to the companies
concerned (Soedaryono, 2012). As for the example of the Physical capital is land buildings, equipment,
technology that easily sold or bought in the market (Firer and Williams, 2003).

Human Capital
Human Capital is the source of innovation and company strategy those from through employees
personal skill to make the company more efficient. Human capital refers to knowledge, skills and
experiences that employees take them with themselves when they leave the organization (Ross and Ross,
1997). Mojtahedi (2013) defined Human Capital as the knowledge, skills and experience that employees
take with them when they leave. Some of this knowledge is unique to the individual; some may be
generic. Examples are innovation capacity, creativity, knowhow and previous experience, teamwork
capacity, employee flexibility, tolerance for ambiguity, motivation, satisfaction, learning capacity, loyalty,
formal training and education.
Structural Capital
Structural capital is result of Human Capitals performance, such as organization, license, patent,
image standard, and etc. In other word structural capital is all of intangible assets that own by company. It
is supported by Ahangar (2010) who defined Structural capital as the supportive infrastructure for human
capitalit is the capital which remains in the factory or office when the employees leave at the end of
the day. It includes organizational ability, processes, data and patents. Structural capital includes all nonhuman resources of knowledge in the organization which consists of databases, organizational charts,
procedures and administrative processes, strategies and generally consist of everything that create higher
value for the organization rather than its physical aspect (Ross and Ross, 1997).
Company Financial Performance
Return on Assets (ROA)
Australian Shareholders Association (2010) defined return on assets (ROA) is a measurement of
management performance. ROA tells the investor how well a company uses its assets to generate income.
A higher ROA denotes a higher level of management performance. ROA can be measured by dividing
total net income in one period with total assets owned by company that reflected in company financial
statement. ROA explain how well the company use their assets in create profits. A positive and rising

result of ROA will interpret a good management performance in using assets for creating profits, as long
as other companys ROA is almost the same or less than the company.
Net Profit Margin (NPM)
Net Profit Margin is an indicator that reflects the range between Revenue/Sales and Net Income.
NPM meanwhile indicate what percentage of a companys sales revenue would remain after all costs have
been taken into account (Australian Shareholders Association, 2010). It means NPM could be determined
by dividing the amount of total Net Income with the amount of Total Sales. NPM can use as a ratio to
compared with other companies or analyzed over year. Declining amount of NPM over the year indicate
increasing amount of expenditure used in order to reach sales. Rising amount of NPM over the year
indicate efficiency used of expenditure in order to reach sales.
Thesis Development
Based on research theoretical framework, so this research developed the following hypothesis;
1.1 Ho : Physical Capital has no correlation to influence the company Return on Assets.
Ha : Physical Capital has positive correlation to influence the company Return on Assets.
1.2 Ho : Physical Capital has no correlation to influence the company Net Profit Margin.
Ha : Physical Capital has positive correlation to influence the company Net Profit Margin.

2.1 Ho
Ha
2.2 Ho
Ha

: Human Capital has no correlation to influence the company Return on Assets.

: Human Capital has positive correlation to influence the company Return on Assets.
: Human Capital has no correlation to influence the company Net Profit Margin.
: Human Capital has positive correlation to influence the company Net Profit Margin.

3.1 Ho : Structural Capital has no correlation to influence the company Return on Assets.
Ha : Physical Capital has positive correlation to influence the company Return on Assets.
3.2 Ho : Structural Capital has no correlation to influence the company Net Profit Margin.
Ha : Structural Capital has positive correlation to influence the company Net Profit Margin.

4.1 Ho : Intellectual Capital Performance has no correlation to influence the company Return on
Assets.
Ha

: Intellectual Capital Performance has positive correlation to influence the company Return on
Assets.

4.2 Ho : Intellectual Capital Performance has no correlation to influence the company Net Profit
Margin.
Ha

: Intellectual Capital Performance has positive correlation to influence the company Net Profit
Margin.

3. Research Framework
Variables and Measurement
This research was focus to measure and analyze the effect of intellectual capital performance
(independent variable) to companys financial performances (dependent variable). Intellectual capital
performance is divided into three categories; Physical Capital, Human Capital, Structural Capital and
Value Added Intellectual Capital (VAIC). Then, company performance was measure by using ratio
analysis which consists of Return on Assets Ratio and Net Profit Margin Ratio. Therefore, researcher used
exploratory study to fulfil the research objective.
Data Collection
Population of this research is all of financial sector those categories on Non-banking Company
that are listed in Indonesias stock exchange, such as: Insurance Company, Securities Company, Finance
Company and Other Financial Company. This Researcher used purposive sampling which take sample
base on population performance to meet the researcher requirement of sample. Then, requirements of
sample were:

Classified as financial sector company, especially Insurance Company, Security

Company, Finance Company and Other Financial Company.

Disclose the financial statement at least in 3 years from 2011 to 2013 and never get net
loses over the year.

Never delisted from Indonesia Stock Exchange and provide annual report to Indonesia
Stock Exchanges.

Accounting date is ended at December 31.

Data Analysis Method

First thing that should be done before test the hypothesis is doing a classical assumption test.
Classical assumption test is a test to examine the quality of the data that will be used in the research. The
objective of this test is to estimate the independent variable as the estimator of dependent variable is not
biased. The following classical assumption test that are use: 1) Normality Test. Normality test is used to
determine whether the data are used is normal and included in data range. 2)

Multicollinearity Test.

Multicollinearity test should be done to test dependability correlation between independent variables. 3)
Autocorrelation Test. Autocorrelation test should be done to examine independence of residual. 4)
Heteroscedasticity Test. Heteroscedasticity test is a test to show occurrence of residual variance inequality
in observation. After data passed the classic assumption test, it allow to examine the hypothesis.
Hypothesis Testing
Statistic t-Test
The aim of statistic t-test is to individually test how significant independent variable influence
dependent variable. If t count t table, it means independent variabe have simultaneously and
significantly affects to dependent variable. Meanwhile if t count < t table, it means independent varibale
have simultaneously and significantly affect to dependent variable. Then Yamin and Kurniawan (2009)
also explain result of t-test can be seen from significance level (p-value). If t table is smaller than t count,
it means there is have a significant correlation between independent variable and dependent variable and if
t table, it means there is no significant relatioship between independent variable and dependent variable.
Coefficient of Determination (R2)
According to Janie (2012) Coefficient of Determination is used to measure how far the ability of
the model in explaining the variation in independent variable. The coefficient of determination is between

zero and one. The criteria of this method are if the result is close to one it means independent variable
provide almost all the information needed to predict the variation of dependent variable, and if the result
close to zero it means the variation of independent variable is limited.
Regression Model Analysis
In order to examine the research hypothesis, this research used regression models. The analysis
method used to measure the correlation of the independent variable and dependent variable. Basic form of
Equation Model (Yamin and Kurniawan, 2010):
Y = + 1X1 + 2X2 + 3X3 +
Where: Y = Dependent Variable
X1 = Independent Variable1,
X2 = Independent Variable2,
X3 = Independent Variable3,
1, 2, 3 = Regression Coefficient,
0 = Intercept,
= Error
Regression model of independent variable and dependent variable were;
(1)

ROA = + 1VACA + 1VAHU + 1STVA +

(2)

ROA = + 1VAIC +

(3)

NPM = + 1VACA + 1VAHU + 1STVA +

(4)

NPM = + 1VAIC +

4. Analysis and Discussion

General Description
This research analyzes the correlation between Intellectual Capital to Company Financial
Performance. Intellectual Capital Performance can be measured by using Value Added Intellectual
Coefficient (VAIC) which consist of few components such as; Performance Physical Capital (VACA),

Human Capital (VAHU) and Structural Capital (STVA). In order to calculate the Company Financial
Performance, this research use ratio analysis and it was represented by Return on Assets (ROA) and Net
Profit Margin (NPM).
Even Indonesia Stock Exchange already divide the companies into many sector, but this research
focused to companies on Financial Sector exclude Banking Company that listed from 2011 to 2013. Total
population of this research is 126 financial statements taken from 42 companies each year from 2011 to
2013. They are Insurance Company, Financing Company, Securities Company and Other Financial Sector
Company. Sampling for this research is selected by using purposive sampling method. It yields 33
companies or 99 financial statements for 3 years that fulfil the samples criteria.
Classic Assumption Test
In this study data already passed the classic assumption test. First, Normality test shows data are
normal distributed. Second, Data is free from multicollineariliy. It means independent variable have no
correlation between other independent variable.
Then, Autocorrelation Test shows there is no autocorrelation in all of model. Last of classic
assumption test is heterocedasticity test. Result showed, there are no indications of heterocedasticity
occurrence.
Hypothesis Testing
The correlation between independent variable and dependent variable can be tested individually
by using Statistical t-test. The result of statistical t-test show on following table:

Statistical t Test

NO
.

Variable

ROA
(Constant)
VACA
VAHU
STVA

ROA
(Constant)
VAIC
NPM
(Constant)
VACA
VAHU
STVA

NPM
(Constant)
VAIC

t
Tabl
e
1.66
1
1.66
1
1.66
1
1.66
1
1.66
1
1.66
1
1.66
1
1.66
1

t
Count

Sig

-4.481
10.962
2.313
1.296

0.000
0.000
0.023
0.198

1.387
6.245

0.169
0.000

1.417
-0.303
2.090
0.066

0.502
0.762
0.039
0.948

1.525
4.887

0.131
0.000

Source: Secondary Data from SPSS 18

Table 4.8 above presented the Statistical t Test to test the correlation between each of independent
variable and dependent variable to test the hypothesis. Independent variable will affect dependent variable
if t-count is greater than t-table. Yamin and Kurniawan (2009) also describe it can be seen from
significance (p-value). Independent variable will be assumed affect dependent variable if significance
value (p-value) less than 0.05
From table above, it can be explained first, the correlation between components of intellectual
capital (VACA, VAHU and STVA) to Return on Assets (ROA). The result on t-test obtained the t-count
value of VACA, VAHU and STVA are 10.962, 2.313 and 1.296. Meanwhile the significance value of
VACA, VAHU and STVA are 0.000, 0.023 and 0.198. T-table is obtained equals to 1.661. It means VACA

and VAHU have positive affects to ROA because the t-count is bigger than t-table and the significance
value is lower than 0.05. Otherwise, STVA has negative affects to ROA because t-count is smaller than ttable and significance value is higher than 0.05. So, hypothesis null (H o) of hypothesis 1.1 and 1.2 are
rejected and 3.1 is accepted.
Next, the correlation of Value Added Intellectual Coefficient (VAIC) to Return on Assets (ROA)
has obtained the t-count equal to 6.245. Meanwhile the significance value is 0.000. T-table is 1.661. It
means VAIC have positive affects to ROA because the t-count is bigger than t-table and the significance
value is lower than 0.05. So, hypothesis null (Ho) of hypothesis 4.1 is rejected.
Then, statistical t-test had test the correlation between components of intellectual capital (VACA,
VAHU and STVA) to Net Profit Margin (NPM). T-test obtained the t-count value of VACA, VAHU and
STVA are -0.303, 2.090 and 0.066. Meanwhile the significance value of VACA, VAHU and STVA are
0.763, 0.039 and 0.948. T-table is obtained equals to 1.661. It means VACA and STVA have negative
affects to NPM because the t-count is smaller than t-table and the significance value is higher than 0.05.
Otherwise, VAHU has positive affects to NPM because t-count is bigger than t-table and significance
value is lower than 0.05. So, hypothesis null (H o) of hypothesis 1.2 and 3.2 are accepted and hypothesis
null (Ho) of hypothesis 2.2 is rejected.
Last, the correlation of Value Added Intellectual Coefficient (VAIC) to Net Profit Margin (NPM)
has obtained the t-count equal to 4.887. Meanwhile the significance value is 0.000. T-table is 1.661. It
means VAIC have positive affects to ROA because the t-count is bigger than t-table and the significance
value is lower than 0.05. So, hypothesis null (Ho) of hypothesis 4.2 is rejected.
Result and Discussion
Based on result acquired from statistic, the correlation between Intellectual Capital to Company
Financial Performance show on following hypothesis testing table;
Summary of Hypothesis Test

Hypothesi
s
H0 1.1

Hypothesis Statement
Physical Capital (VACA) has no correlation to

Conclusion
Rejected

H0 1.2
H0 2.1
H0 2.2
H0 3.1
H0 3.2
H0 4.1
H0 4.2

influence the company Return on Asset (ROA)

Physical Capital (VACA) has no correlation to
influence the company Net Profit Margin
(NPM)
Human Capital (VAHU) has no correlation to
influence the company Return on Asset (ROA)
Human Capital (VAHU) has no correlation to
influence the company Net Profit Margin
(NPM)
Structural Capital (STVA) has no correlation to
influence the company Return on Asset (ROA)

Accepted
Rejected
Rejected
Accepted

Structural Capital (STVA) has no correlation to Accepted

influence the company Net Profit Margin
(NPM)
Value Added Intellectual Coefficient (VAIC) has Rejected
no correlation to influence the company Return
on Asset (ROA)
Value Added Intellectual Coefficient (VAIC) has Rejected
no correlation to influence the company Net
Profit Margin (NPM)

Result on t-test obtained the t-count of VACA correlation to ROA is 10.962 and significance value
is 0.000. The result of t-test showed VACA has positive effect to ROA because t-count is greater than ttable which is equal to 1.661 and significance value is lower than 0.05. It means hypothesis null (H 0) of
hypothesis 1.1 is rejected with 67.4% result of Coefficient of Determination. This result is linear to Fathi
et all (2013) and Soedaryono et all (2012). So if company spent larger amount on physical capital it means
it will increase the revenue that reflected on return on assets as well.
In the other hand the correlation of VACA to NPM is statistically has negative effect. It was
reflected on the result of t-count which equal to -0.303 and it is smaller than t-table which equal to 1.661.
It also supported by the significance value is higher than 0.05 which equal to 0.762. It means the
hypothesis null (H0) of hypothesis 1.2 is being accepted. So if company spent on large amount on physical
capital it will increase expense and it will reduce the profit.
Next, result on t-test obtained the t-count of VAHU correlation to ROA is 2.313 and significance
value is 0.023. The result of t-test showed VAHU has positive effect to ROA because t-count is bigger

than t-table which is equal to 1.661 and significance value is lower than 0.05. It means hypothesis null
(H0) of hypothesis 2.1 is rejected with 67.4% result of Coefficient of Determination. This result is linear to
Fathi et al (2013), Moradi et al (2013) and Soedaryono et al (2012). So, companys organizational
routines, procedures, systems, cultures and databases can support the management in obtaining the return
that reflected in return on assets as well.
In the other hand the correlation of VAHU to NPM is statistically has positive effect. It was
reflected on the result of t-count which equal to 2.090 and it is bigger than t-table which equal to 1.661. It
also supported by the significance value is lower than 0.05 which equal to 0.039. It means the hypothesis
null (H0) of hypothesis 2.2 is rejected with 20.0% result of Coefficient of Determination. So, companies
spent on employees salary and other return to them will make them be efficient and effective in using cost
and expense and increase the profit that will be acquired.
Then, Result on t-test obtained the t-count of STVA correlation to ROA is 1.296 and significance
value is 0.198. The result of t-test showed VAHU has negative effect to ROA because t-count is smaller
than t-table which is equal to 1.661 and significance value is higher than 0.05. It means hypothesis null
(H0) of hypothesis 3.1 is accepted. So company spent on employees salary and other return to them cant
give any contribution in increasing return.
In the other hand the correlation of STVA to NPM is statistically has negative effect. It was
reflected on the result of t-count which equal to 0.066 and it is smaller than t-table which equal to 1.661. It
also supported by the significance value that higher than 0.05 which equal to 0.948. Companys
organizational routines, procedures, systems, cultures and databases cant significantly support company
to reach higher profit or reduce cost that reflected on negative result of STVA correlation to NPM. It
means the hypothesis null (H0) of hypothesis 3.2 is accepted.
Last, result on t-test obtained the t-count of VAIC correlation to ROA is 6.245 and significance
value is 0.000. The result of t-test showed VAIC has positive effect to ROA because t-count is bigger than
t-table which is equal to 1.290 and significance value is lower than 0.05. It means hypothesis null (H 0) of
hypothesis 4.1 is rejected with 28.7% result of Coefficient of Determination. This result is in line with

Suhendah (2012) and Moradi et al (2013). So, it reflected intellectual capital actually has positive
correlation if company gives more amounts on it to increase the company return.
In other hand the correlation of VAIC to NPM is statistically has also positive effect. It was
reflected on the result of t-count which equal to 4.887 and it is higher than t-table which equal to 1.290. It
also supported by the significance value is lower than 0.05 which equal to 0.000. It means the hypothesis
null (H0) of hypothesis 4.2 is rejected with 19.8% result of Coefficient of Determination. So, Intellectual
capital is not only has positive correlation to return but also intellectual capital can make company become
more effective and efficient spent cost to increase company profit.
5. Conclusion, Implication and Limitation of the Study
Conclusion
Based on research conducted on the effect of intellectual capital performance and their
components that have been tested using regression analysis and it can be concluded that:
1. Physical Capital (VACA) has positive effect on Return on Assets (ROA) for 67.4%, but it has no
effect on Net Profit Margin (NPM) in financial sector Non-Banking Companies that Listed in
Indonesia Stock Exchange from 2011-2013.
2. Human Capital (VAHU) has positive effect on Return on Assets (ROA) for 67.4% and Net Profit
Margin (NPM) for 20.0% in financial sector Non-Banking Companies that Listed in Indonesia
Exchange from 2011-2013.
3. Structural Capital (STVA) has no effect on Return on Assets (ROA) and Net Profit Margin (NPM) in
financial sector Non-Banking Companies that Listed in Indonesia Exchange from 2011-2013.
4. Intellectual capital performance that has measured by Value Added Intellectual Coefficient (VAIC)
shows positive effect on Return on Assets (ROA) for 28.7% and Net Profit Margin (NPM) for
19.8% in financial sector Non-Banking Companies that Listed in Indonesia Exchange from 20112013.
Implication

The implication of this study is related to management of a firm. It can be a consideration for
managers to invest in intellectual capital. This study shows intellectual capital has positive effect on
financial performance that measured by Return on Assets (ROA) and Net Profit Margin (NPM). So,
managers can be more effective in using companys resources to increase companys performance.
Another implication is for the next researcher can use this study as a reference for further research of
intellectual capital and its effect to financial performance.

Limitation of the Study

First limitation on this study is use 99 sample only. It takes from company that categorized into
financial sector non-banking companies that listed on Indonesia Stock Exchange (IDX) and from 2011 to
2013. Then, focus of this study is companys financial performance that measured by profitability ratio.
While there is another ratios category that can be used, such as; liquidity ratio, leverage ratio, market
ratio, or etc. Last, some of independent variable that has weak effect to dependent variable can not be
explained in this research.
Suggestion for Next Research
Suggestion for next research may use the entire financial sector companies that listed on Indonesia
Stock Exchange, without diversifying it into banking companies and non-banking companies. Then, next
research can use other sectors, such as; information technology, transportation, service or etc, to see the
effect of intellectual capital to companys financial performance. After that, next research may also use
longer observation period to get more clear result regarding to the effect of intellectual capital
performance on companys financial performance. Last, next research may find another factors were
effected some of independent variable that have not strong enough effect to dependent variable.