Company Internal Factors and Their Influences on Financial Performance
Panel Data Analysis
DOI:
https://doi.org/10.32332/ijie.v3i2.3827Keywords:
Leverage, Firm Size, Liquidity, Data Panel Analysis, Return on AssetsAbstract
This research aims to systematically, actual, and accurately explain the facts and characteristics of the company and their effect on financial performance. Data in the form of time-series data from 2015-2019 and cross-section data collected from the financial statements of automotive companies listed on the Indonesia Stock Exchange then obtained nine companies that meet the criteria. The independent variables are Firm Size, Leverage, Liquidity, and the dependent variable is financial performance as proxied by Return On Equity (ROA). The research used panel data techniques; Common Effect Model, Fixed Effect Model, and Random Effect Model. The results show that Firm Size partially has a negative and significant effect, meaning that the greater the assets owned by the company, the more complex the agency problems faced. The partial leverage variable has a negative and significant effect, means that the use of relatively high debt will cause fixed costs in the form of interest expenses and loan principal installments to be paid, the greater the fixed costs. The liquidity variable partially has a positive and insignificant effect. This means that changes that occur in both the number of current assets or current liabilities affect increasing profits so that the increase in Liquidity (CR) or the level of liquidity affects changes in increasing company performance (ROA).
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References
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Wibowo, A. & Wartini, S. 2012. Efficiency of Working Capital, Liquidity and Leverage on Profitability in Manufacturing Companies on the IDX. JDM, 3(1), 49-58
Widystuti, M. 2019. Analysis of Liquidity, Activity, Laverage, Financial Performance and Company Value in Food and Beverage Companies Listed on the Indonesia Stck Exchange. SSRG International Journal of Economics and Management (SSRG-IJEMS), 6(5), 52-58.
Ardiansyah, EF and Sari, LP 2017. The Effect of Leverage, Liquidity, and Firm Size on Profitability in Mining Companies Listed on the Indonesia Stock Exchange.
Asandimitra, N., & Rahayu, FD 2014. The Effect of Firm Size, Leverage, Profitability, Dividend Policy and Cash Holding on Firm Value in the Manufacturing Sector. Journal of Management Science, 2(2), 548–581.
Atika. 2016. The Effect of Leverage Ratio and Activity on Profitability at PT Siantar Top, Tbk. Listed on the Indonesia Stock Exchange. Journal of FINANCIAL, 2(1), 8-14
Brigham, EF, & Houston, JF 2006. Fundamentals of Financial Management Basics of Financial Management Edition 10 Book 2. Jakarta: Salemba Empat.
Durrah, O., Rahman, AAA, Syed Ahsan J. and Nour Aldeen G. 2016. Exploring the Relationship between Liquidity Ratios and Indicators of Financial Performance: An Analytical Study on Food Industrial Companies Listed in Amman Bursa. International Journal of Economics and Financial Issues, 6(2), 435-441.
Epi, Y. 2017. The Effect of Firm Size, Managerial Ownership Structure and Earnings Management on the Performance ofCompanies Property and Real Estate Listed on the Indonesia Stock Exchange. Accounting Research & Journal, 1(1), 1-7.
Fachrudin, KA 2011. Analysis of the Effect of Capital Structure, Firm Size and Agency Cost on Company Performance. Journal of Accounting and Finance, 13(1).
Gujarati, DN, & Porter, DC 2013. Fundamentals of Econometrics Edition 5 Book 2. Jakarta: Salemba Empat.
Gunde, YM, Murni, S. & Rogi, MH 2017. Analysis of the Effect of Leverage on Profitability in Manufacturing Companies of the Food And Beverages Sub-Industry Listed on the IDX (Period 2012-2015). EMBA Journal, 5(3), 4185-4194
Halim, A. 2015. Business Financial Management: Concepts and Applications. First Edition. Jakarta: Media Discourse Partners.
Kouser, R., Bano, T., Azeem, M. & Ulhassan, M. 2012. “Inter-relationship between profitability, growth and size : a case of non-financial companies from Pakistan”, Pakistan Journal of Commerce and Social Sciences , 6(2), 405-419.
Marfuah, A, & Zulhilmi. 2015. The Influence of Growth Opportunity, Net Working Capital, Cash Conversion Cycle and Leverage on Cash Holding Companies. Journal of Optimum Economics and Development. 5(1), 32-43.
Mualifah, S., Oemar, A. & Hartono. 2017 Effect of Financial Leverage, Working Capital, Sales Growth, Firm Size and Leverage on Profitability in Manufacturing Companies Listed on the Indonesia Stock Exchange (IDX) 2011-2015). Scientific Journal of Accounting Unpand. 3(3).
Mursalim, A. 2018. Analysis of Factors Influencing the Financial Performance of Automotive Companies and Components Listed on the Indonesia Stock Exchange. JURNAL EKSIS, 14(2), 3436 – 3530
Niresh, JA, and Velnampy, T. 2014. “Firm Size and Profitability: A Study of Listed Manufacturing Firms in Sri Lanka”. Sri Lanka: University of Jaffna.
Odalo, S. and George, A. 2016. Liquidity and Financial Performance in Agricultural Firms Listed in The Nairobi Securities Exchange in Kenya. International Journal of Business and Social Science 7(7), 57-65.
Purnamasari, ED 2017. Analysis of the Effect of Laverage on Company Profitability Including Lq45 Period August 2015 – January 2016 on the Indonesia Stock Exchange. Scientific Journal of Today's Global Economics, 8(1), 39-45
Putra, AAWY P & Badjra, IB 2015. The Effect of Leverage, Sales Growth and Firm Size on Profitability. E-Jurnal Manajemen Unud, 4(7), 2052-2067
Sari, NMV and Budiasih, IGAN 2014. Effect of Debt to Equity Ratio, Firm Size, Inventory Turnover and Assets Turnover on Profitability. E-Jurnal of AccountingUdayana University,, 6 (2), 261-273.
Silalahi, A. and Lilis A. 2017. The Effect of Disclosure of Corporate Social Responsibility, Leverage and Firm Size on Financial Performance. Journal of Accounting Science and Research, 6(8), 1-18.
Silalahi, A. and Lilis A. 2017. The Effect of Disclosure of Corporate Social Responsibility, Laverage and Firm Size on Financial Performance. Journal of Accounting Science and Research 6)8), 1-18.
Sukadana, IKA & Traryati, N. 2018. The Effect of Sales Growth, Firm Size, and Leverage on Profitability in IDX Food And Beverage Companies. Journal of Management Unud, 7(11), 6239–6268
Sulastri, A., D. Fitri P and Fauziati. 2016. The Effect of Laverage, Firm Size and Environmental Performance on the Financial Performance of Companies Listed on the IDX. Journal of the Faculty of Economics, 8(1), p. 1-11.
Tambunan, JTA, Prabawani Month. 2018. The Influence of Firm Size, Laverage and Capital Structure on Company Financial Performance (Manufacturing Companies in the Multi-Industrial Sector 2012-2016). Diponegoro Journal of Social and Politic, 1-10
Utami, WB, and Sri Laksmi, P. 2016. The Influence of Liquidity, Solvency, and Asset Management on Financial Performance of Go Public Companies Listed in Kompas 100 in Indonesia. Journal of Accounting and Taxes, 17(1), 63-72.
Wibowo, A. & Wartini, S. 2012. Efficiency of Working Capital, Liquidity and Leverage on Profitability in Manufacturing Companies on the IDX. JDM, 3(1), 49-58
Widystuti, M. 2019. Analysis of Liquidity, Activity, Laverage, Financial Performance and Company Value in Food and Beverage Companies Listed on the Indonesia Stck Exchange. SSRG International Journal of Economics and Management (SSRG-IJEMS), 6(5), 52-58.
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Published
2021-12-31
Issue
Section
Articles
How to Cite
Company Internal Factors and Their Influences on Financial Performance: Panel Data Analysis (L. Renfiana & Y. Ardana , Trans.). (2021). International Journal of Islamic Economics, 3(02), 177-193. https://doi.org/10.32332/ijie.v3i2.3827
