FINANCIAL PERFORMANCE OF THE MANUFACTURING SECTOR CONSUMPTIVE GOODS SUB-SECTOR IN INDONESIA

M Noor Salim,M Redho Santosyah

doi:10.29121/ijetmr.v6.i8.2019.446

Abstract

This study aims to examine and analyze the influence of Current Ratio (CR), Return On Assets (ROA) and Debt to Equity Ratio (DER) on Dividend Payout Ratio (DPR) and its impact on Stock Return on Manufacturing Companies of Consumptive Goods Sub-sector listed in Indonesian Stock Exchange in the period of 2012 until 2016. The data used are secondary data in the form of company's financial statements obtained from Indonesia Stock Exchange. The sample of this study using purposive sampling method and obtained 14 companies that meet the criteria set. The method of data analysis using panel data regression analysis, then tested the best model and classical assumption test. The result of data analysis show that partially CR and DER have an insignificant negative effect to Stock Return and ROA has an insignificant positive effect to Stock Return. Furthermore, partially CR has an insignificant positive effect to DPR, ROA has an insignificant negative effect to DPR and DER has a significant negative effect to DPR. Simultaneously CR, ROA and DER have an insignificant positive effect to Stock Return but simultaneously CR, ROA and DER have a significant positive effect to Stock Return.

Highlights

A country's investment growth will be influenced by the country's economic growth itself
Based on the results of research that has been conducted on consumer goods manufacturing subsector companies during the period 2010-2016, results are obtained that : 1) The company's liquidity measured by Current Ratio (CR) has a negative and not significant effect on stock returns
10) The indirect effect of liquidity, profitability and solvency on stock returns with through the Dividend Payout Ratio (DPR) is greater. This shows that the existence of the DPR as an intervening variable can better explain the effect of liquidity, profitability and solvency on stock returns

Summary

Introduction

A country's investment growth will be influenced by the country's economic growth itself. One of them is the growth of the manufacturing industry which consists of various industrial sub-sectors including the consumer goods sub-sector which consists of the food, beverage and tobacco industries. The consumer goods sub-sector manufacturing company is one of the main targets of the non-oil and gas industry's contribution to Indonesia's GDP. The efforts of companies or industries to increase their production and sales certainly need to be supported by adequate capital. This situation requires sufficient funding needs for companies to survive and compete. One way that companies take to meet the needs of funds to develop the company so that it can still compete is by giving a signal to investors to invest.

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Discussion

Conclusion