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2021•JURNAL MANAJEMEN BISNISOpen access

Effect of Profitability, Leverage, and Liquidity on Dividend Policy: Evidence from Manufacturing Companies in Indonesia

Andi Tenri Uleng Akal, Nurlaela Nurlaela, Sri Wahyuni Nur

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Abstract

Profitability (ROA) and leverage (DER) have a favorable and material impact on the dividend policies of food and beverage manufacturing companies listed on the IDX. That is, if profitability and leverage continue to improve, so will the dividend policy. In comparison to liquidity (current ratio), which has a positive but negligible effect on the dividend policy of food and beverage manufacturing companies that are listed on the IDX. It may be concluded that while liquidity owned by the company can help enhance dividends, it cannot have a major impact on dividend policy reform. Increased dividend policy will entice investors. Thus, dividend policy can be improved by this research by optimizing asset utilization (ROA) and lowering the danger of debt relief (DER).

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What this paper is about

Profitability (ROA) and leverage (DER) have a favorable and material impact on the dividend policies of food and beverage manufacturing companies listed on the IDX. That is, if profitability and leverage continue to improve, so will the dividend policy. In comparison to liquidity (current ratio), which has a positive but negligible effect on the dividend policy of food and beverage manufacturing companies that are listed on the IDX. It may be concluded that while liquidity owned by the company can help enhance dividends, it cannot have a major impact on dividend policy reform. Increased dividend policy will entice investors. Thus, dividend policy can be improved by this research by optimizing asset utilization (ROA) and lowering the danger of debt relief (DER).

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Available abstract

Profitability (ROA) and leverage (DER) have a favorable and material impact on the dividend policies of food and beverage manufacturing companies listed on the IDX. That is, if profitability and leverage continue to improve, so will the dividend policy. In comparison to liquidity (current ratio), which has a positive but negligible effect on the dividend policy of food and beverage manufacturing companies that are listed on the IDX. It may be concluded that while liquidity owned by the company can help enhance dividends, it cannot have a major impact on dividend policy reform. Increased dividend policy will entice investors. Thus, dividend policy can be improved by this research by optimizing asset utilization (ROA) and lowering the danger of debt relief (DER).

Key concepts: Dividend policy, Leverage (statistics), Dividend, Market liquidity, Profitability index, Business, Monetary economics, Debt

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Effect of Profitability, Leverage, and Liquidity on Dividend Policy: Evidence from Manufacturing Companies in Indonesia — Research Paper | ScholarLens