Propose Research Models and Hypotheses on the Impact of Current Ratio, Return on Assets, Total Assets Turn Over, Leverage Index, Total Accrual on Total Assets to Dividend Payout Ratio for Manufacturing Enterprises

Abstract

The dividend payout ratio is an important criterion for investors to evaluate the performance of a business. However, determining the level and rate of dividend payment has a great influence on the development strategy and business activities of the enterprise in the future. Therefore, the decision on the dividend payout ratio is always considered and considered carefully by businesses. The objective of this study is to propose a model and develop a research hypothesis so that investors and management can consider the factors affecting the dividend payout ratio. The article uses two research methods, which are the document review method and the meta-analysis method. The authors have proposed three theories including signal theory, agency cost theory, optimal capital structure theory and presented the results of outstanding studies. Analyzing the theoretical basis and reviewing the research, the authors have drawn the financial indicators that affect the dividend payout ratio, namely Current Ratio, Return on Assets, Total Assets Turn Over, Leverage Index. Combining these factors and proposing a new factor, Total Accrual on Total Assets, the authors have built a model of 5 independent variables, respectively Current Ratio, Return on Assets, Total Assets Turn Over, Leverage Index, Total Accrual on Total Assets and dependent variable Dividend Payout Ratio. The article also builds research hypotheses for independent and dependent variables. According to the hypothesis stated, these variables have an impact on the dividend payout ratio of the enterprise and when the independent variables increase, the dividend payout ratio will increase accordingly. The proposed model will be a means of supporting investors and the management board to have an appropriate plan to achieve efficiency for both parties in investment and production and business.