The Effect Of Managerial Ownership, Dividend Policy, Profitability, And Asset Structure On Debt Policy On Manufacturing Companies Listed On The Indonesia Stock Exchange In 2013-2015

The Effect of Managerial Ownership, Dividend Policy, Profitability, and Asset Structure on Debt Policy on Manufacturing Companies on the 2013-2015 Indonesia Stock Exchange

Introduction

The Indonesia Stock Exchange (IDX) is one of the largest stock exchanges in Southeast Asia, with a significant number of manufacturing companies listed on it. The debt policy of these companies is a crucial aspect of their financial management, as it affects their ability to raise funds, manage risk, and achieve their business objectives. This study examines the effect of managerial ownership, dividend policy, profitability, and asset structure on debt policy on manufacturing companies listed on the IDX during the 2013-2015 period.

Methodology

This study uses the associative causal method, with the research population covering all manufacturing companies listed on the IDX during that period. Sampling techniques using purposive sampling, with certain criteria, so that 31 manufacturing companies were selected as samples, with a total of 141 financial statement data for 3 years. The statistical method used is multiple linear regression.

Research Result

The results showed that managerial ownership has a positive influence (0.254) but not significant (0.056) on debt policy. Dividend policy has a negative influence (-0.041) and is not significant (0.383) on debt policy. Profitability has a negative influence (-1,147) and significant (0.009) on debt policy. The asset structure has a positive influence (0.032) and is not significant (0.857) on debt policy.

Simultaneous testing shows that managerial ownership, dividend policy, profitability, and asset structure jointly affect the debt policy, with the value of f (3.005) and significant (0.022). The multiple linear regression equation produced is:

Y = 0.568 + 0.254mown - 0.041DPR - 1,147ROA + 0.032AS + E

Analysis and Explanation

Managerial Ownership

The results showed that managerial ownership has a positive influence on debt policy, but is not significant. This shows that the higher managerial ownership, tends to increase the use of debt. This may be caused by the desire of managers to maximize the value of the company, and debt can be one way to achieve these goals. However, this influence is not significant, shows that other factors may be more dominant in determining debt policy.

Dividend Policy

The results showed that dividend policy had a negative influence on debt policy, but was not significant. This indicates that the higher the dividend distributed, tends to reduce the use of debt. This may be because companies with high dividend policies tend to have a stronger source of internal funding, thereby reducing dependence on debt. However, this influence is also not significant, indicating that other factors may be more important in determining debt policy.

Profitability

The results showed that profitability has a negative and significant influence on debt policy. This shows that the higher the company's profitability, tends to reduce the use of debt. This may be because companies with high profitability have the ability to finance their needs from operational results, thereby reducing the need for debt. These results are consistent with the trade-off theory, which states that the company will choose the optimal combination between equity and debt to maximize the company's value.

Asset Structure

The results showed that the asset structure had a positive influence on debt policy, but was not significant. This shows that the higher the ratio of assets to equity, tends to increase the use of debt. This may be because companies with high asset to equity ratio tend to require more funds to finance their assets, so that the use of debt is a more attractive choice. However, this influence is not significant, indicating that other factors may be more important in determining debt policy.

Conclusion

This study shows that profitability is a significant factor in determining debt policy on manufacturing companies on the IDX. Companies with high profitability tend to be lower in using debt. Other factors, such as managerial ownership, dividend policy, and asset structure, also have an influence on debt policy, but the influence is not significant.

Recommendation

Based on the results of this study, it is recommended for manufacturing companies on the IDX to increase profitability to reduce dependence on debt. In addition, companies can consider conducting more in-depth analysis of other factors, such as managerial ownership, dividend policy, and asset structure, in order to optimize their debt policy.

Suggestion

Further research can be done by considering other factors that might affect debt policy, such as business risk, macroeconomic conditions, and banking regulations.

Limitation

This study has several limitations. Firstly, the sample size is relatively small, which may affect the reliability of the results. Secondly, the study only considers the effect of managerial ownership, dividend policy, profitability, and asset structure on debt policy, and does not consider other factors that may also affect debt policy.

Future Research

Future research can be done by considering other factors that might affect debt policy, such as business risk, macroeconomic conditions, and banking regulations. Additionally, the study can be replicated in other countries to see if the results are generalizable.

Conclusion

In conclusion, this study provides insights into the effect of managerial ownership, dividend policy, profitability, and asset structure on debt policy on manufacturing companies listed on the IDX during the 2013-2015 period. The results show that profitability is a significant factor in determining debt policy, and companies with high profitability tend to be lower in using debt. Other factors, such as managerial ownership, dividend policy, and asset structure, also have an influence on debt policy, but the influence is not significant.
Q&A: The Effect of Managerial Ownership, Dividend Policy, Profitability, and Asset Structure on Debt Policy on Manufacturing Companies on the 2013-2015 Indonesia Stock Exchange

Frequently Asked Questions

Q: What is the main objective of this study?

A: The main objective of this study is to examine the effect of managerial ownership, dividend policy, profitability, and asset structure on debt policy on manufacturing companies listed on the Indonesia Stock Exchange (IDX) during the 2013-2015 period.

Q: What is the research methodology used in this study?

A: This study uses the associative causal method, with the research population covering all manufacturing companies listed on the IDX during that period. Sampling techniques using purposive sampling, with certain criteria, so that 31 manufacturing companies were selected as samples, with a total of 141 financial statement data for 3 years. The statistical method used is multiple linear regression.

Q: What are the results of this study?

A: The results showed that managerial ownership has a positive influence (0.254) but not significant (0.056) on debt policy. Dividend policy has a negative influence (-0.041) and is not significant (0.383) on debt policy. Profitability has a negative influence (-1,147) and significant (0.009) on debt policy. The asset structure has a positive influence (0.032) and is not significant (0.857) on debt policy.

Q: What is the significance of this study?

A: This study provides insights into the effect of managerial ownership, dividend policy, profitability, and asset structure on debt policy on manufacturing companies listed on the IDX during the 2013-2015 period. The results show that profitability is a significant factor in determining debt policy, and companies with high profitability tend to be lower in using debt.

Q: What are the implications of this study?

A: The implications of this study are that manufacturing companies on the IDX should focus on increasing their profitability to reduce dependence on debt. Additionally, companies can consider conducting more in-depth analysis of other factors, such as managerial ownership, dividend policy, and asset structure, in order to optimize their debt policy.

Q: What are the limitations of this study?

A: This study has several limitations. Firstly, the sample size is relatively small, which may affect the reliability of the results. Secondly, the study only considers the effect of managerial ownership, dividend policy, profitability, and asset structure on debt policy, and does not consider other factors that may also affect debt policy.

Q: What are the future research directions?

A: Future research can be done by considering other factors that might affect debt policy, such as business risk, macroeconomic conditions, and banking regulations. Additionally, the study can be replicated in other countries to see if the results are generalizable.

Q: What are the practical implications of this study?

A: The practical implications of this study are that manufacturing companies on the IDX should focus on increasing their profitability to reduce dependence on debt. Additionally, companies can consider conducting more in-depth analysis of other factors, such as managerial ownership, dividend policy, and asset structure, in order to optimize their debt policy.

Q: What are the theoretical implications of this study?

A: The theoretical implications of this study are that the trade-off theory is supported, which states that the company will choose the optimal combination between equity and debt to maximize the company's value. Additionally, the study provides insights into the effect of managerial ownership, dividend policy, profitability, and asset structure on debt policy, which can be used to develop new theories and models in the field of finance.

Conclusion

In conclusion, this Q&A article provides insights into the effect of managerial ownership, dividend policy, profitability, and asset structure on debt policy on manufacturing companies listed on the IDX during the 2013-2015 period. The results show that profitability is a significant factor in determining debt policy, and companies with high profitability tend to be lower in using debt.