Company Leverage Research Articles

The Relationship Effect of Board Characteristics and Company Characteristics on Corporate Social Responsibility

This study aims to analyze the influence of board characteristics on CSR policies with the company characteristics as control variables. CSR policy in this study focuses on the amount of CSR costs incurred by the company to contribute to the social and community environment. The data used in this study are secondary data sourced from the annual reports of energy sub-sector companies listed on the Indonesian Stock Exchange (BEI) from 2016-2022. The research sample was selected using the purposive sampling method, resulting in 28 companies as the sample. The data analysis used for hypothesis testing is multiple regression analysis using the Eviews 9 program. The results of the study indicate that board characteristics, as indicated by the variables of board size and firm age, have a significant positive influence on CSR. The results also show that firm size has a significant positive influence on CSR performance, while leverage has a significant negative influence on CSR performance. These findings provide information that the increasing number of board members in important positions within a company will impact the high CSR performance, as well as the maturity of a company indicated by the years since going public will enhance the high concern for the environment. In addition, the level of company leverage will be one of the considerations for investors in investing capital as it will have a negative impact on the adopted CSR policies.

Comparative Analysis of Cash Holding Based on Leverage, Capital Expenditure and Firm Size Factors of Companies in the Properties and Real Estate Sector on the Indonesia Stock Exchange

Comparative Analysis of Cash Holding Based on Leverage, Capital Expenditure and Firm Size Factors of Companies in the Properties and Real Estate Sector on the Indonesia Stock Exchange

Effect of Data Integration Techniques on Operational Efficiency in Manufacturing Industries in Iran

Purpose: The aim of the study was to assess the effect of data integration techniques on operational efficiency in manufacturing industries in Iran. Materials and Methods: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: The study found that by seamlessly amalgamating data from disparate sources across production lines, supply chains, and customer feedback systems, manufacturers have been able to streamline processes, optimize resource allocation, and achieve significant cost savings. For instance, real-time data integration facilitates timely decision-making, allowing for adaptive production planning and inventory management. Furthermore, the integration of advanced analytics and machine learning algorithms has enabled predictive maintenance strategies, reducing downtime and enhancing overall equipment effectiveness (OEE). These technological advancements not only bolster operational efficiency but also foster innovation, as companies leverage integrated data insights to drive continuous improvement initiatives and meet evolving consumer demands. Implications to Theory, Practice and Policy: Resource-based view (RBV), technology acceptance model and dynamic capabilities theory may be used to anchor future studies on assessing the effect of data integration techniques on operational efficiency in manufacturing industries in Iran. Manufacturing firms should prioritize strategic implementation plans for data integration technologies to ensure that investments in IoT, AI, ETL, data warehousing, data virtualization, and APIs are aligned with their overall business objectives. Policymakers should provide incentives and support for the adoption of advanced data integration technologies in the manufacturing sector.

Pengaruh Ukuran Perusahaan, Leverage, dan Pertumbuhan Penjualan terhadap Manajemen Laba: Corporate Governance sebagai Pemoderasi

This study aims to examine and analyze the effect of the interaction of good corporate governance in moderating firm size, leverage, and sales growth on earnings management. The sample in this study is LQ-45 companies on the Indonesia Stock Exchange in the 2016- 2020 period. This study uses purposive sampling in selecting the sample to be used, obtained 33 companies as samples in the study. Therefore, the results of this study indicate that company size has a significant negative effect on earnings management of LQ--45 companies, leverage has a significant positive effect on earnings management of LQ-45 companies, sales growth has a significant positive effect on earnings management in LQ-45 companies in Indonesia. , good corporate governance cannot moderate the relationship between firm size and earnings management in LQ-45 companies, good corporate governance cannot moderate the relationship between leverage and earnings management in LQ-45 companies, good corporate governance cannot moderate the relationship between sales growth and earnings management in companies. LQ-45.

CHIEF EXECUTIVE OFFICER (CEO) CHARACTERISTICS AND COMPANY PERFORMANCE OF MALAYSIAN LISTED COMPANIES

The main objective this research is to examine the relationship between Chief Executive Officer (CEO) characteristics and company performance specifically based on Return on Asset (ROA). Using a sample of 241 Malaysian listed companiesis examined from 2013 to 2015 in various industry listed on Bursa Malaysia. Regression analysis produce significant results for CEO’s education and experience effect ROA. Economic study is important to know in potential economic growth of develop conceptual models of behavior to predict responses to changes in policy and market conditions. CEO experience inthis research prove consistent that longer CEO that stay for a company for a long time may not care about their job and this may lead to poor performance of the company. The result also shows all control variables such as company size, company age and company leverage have significant relationship with the ROA. This study can be expanded using other CEOs characteristics and other performance measure such as Economic Value Added (EVA), Return on Equity (ROE) and Excess in Value.

CAN CORPORATE SUSTAINABILITY PERFORMANCE (CSP) OVERCOME INDONESIA'S CORPORATE DEBT PROBLEMS?

Based on IMF publications (2022), Indonesian companies have a risky debt level that may cause bankruptcy, so companies are required to make leverage adjustments to return the debt to its optimal level. In recent years, corporate sustainability performance (CSP) practices have been proven to improve performance and overcome financial problems such as debt by integrating sustainability aspects into business processes. Based on stakeholder theory and trade-off theory, this study aims to examine the effect of CSP on leverage adjustment and the role of competitive advantage, equity mispricing, profitability, and firm size in moderating this relationship. This study used a sample of 40 listed companies that registered on the Indonesia Stock Exchange and implemented CSP from 2019 to 2022. By using multiple linear regression analysis and moderated regression analysis, this study shows that companies with CSP can increase company leverage adjustments. Meanwhile, company characteristics such as equity mispricing and company size have proven to strengthen this relationship, but competitive advantage and profitability do not influence it. The results of this study provide theoretical and practical benefits by enhancing knowledge about CSP and leverage adjustments, as well as enabling managerial and regulatory parties to make the right decisions.

DIRECTOR'S NATIONALITY DIVERSITY AND COMPANY PERFORMANCE: THE EVIDENCE FROM EMERGING MARKET

This study describes the diversity of directors' nationality from company attributes: company leverage, growth, size, age, and sub-sector. This study also analyses the association between directors' nationality diversity and the performance of Indonesia's listed companies using two measurements: ROA and ROS (accounting performance) and Stock return and Tobin’s Q (market performance). This study used 3,290 observations in 235 companies (from 2004 to 2017). As a result, the level of director nationality diversity varies based on the company size (large vs. small), company age (old vs. young), company growth (high vs. low), company leverage (high vs. low), company sub-sector (central vs. manufacturing vs. trading & service sub-sector). In addition, the diversity of the supervisory board nationality is negatively related to the ROA and Tobin’s Q and positively associated with stock return. The company breaks the negative effect of supervisory board nationality diversity by reducing the periods foreign directors need to familiarise themselves with newly discovered circumstances, such as culture, systems, and language. The company suggests increasing the supervisory board nationality diversity regarding the stock return as detailed theoretical and practical implications.

The Influence of Good Corporate Governance Mechanisms, Leverage, and Company Size on the Audit Quality of Banking Companies Listed on the Indonesian Stock Exchange in 2021-2022

A This research aims to determine the influence of good corporate governance mechanisms, leverage, and company size on the audit quality of banking companies listed on the Indonesia Stock Exchange (BEI) in 2021-2022. Data collection techniques using literature study and documentation. The population in this research is all banking companies registered on the IDX for the 2021-2022 period, namely 44 companies. Data analysis using descriptive statistical tests, classical assumption tests (normality, multicollinearity, heteroscedasticity and autocorrelation), logistic regression tests and hypothesis tests (t test). The research results show that the size of the board of directors, leverage and company size have an effect on audit quality, while the size of the audit committee has no effect on audit quality. This indicates that the larger the size of the Board of Directors, the better the supervisory function. Thus, we will choose the Big Four KAP to guarantee audit quality. The smaller the company's leverage, the greater the company's opportunity to use Big Four KAP. Company size influences the company's decision to use Big Four KAP, while the size of the audit committee does not influence the company's decision to use Big Four or Non-Big Four KAP.

TAX AVOIDANCE IN NON-CYCLICAL CONSUMER COMPANIES REGISTERED ON THE IDX DURING 2020 - 2022

This research aims to obtain empirical evidence regarding the influence of company size, leverage and profitability on tax avoidance in non-cyclical consumer companies listed on the Indonesia Stock Exchange in 2020-2022. The total sample for this research was 48 non-cyclical companies selected using a purposive sampling method. This research uses the classic assumption test before testing the hypothesis and the multiple linear regression method. Random Effect Model is a panel data regression method that is suitable for this research. The dependent variable in this research is tax avoidance where the results obtained are that company size has no effect on tax avoidance, while leverage and profitability have a positive effect on tax avoidance. The higher the company's leverage and profitability, the higher the tax avoidance it incurs. Apart from that, this research also shows that simultaneously the independent variables, namely company size, leverage and profitability, have an effect on tax avoidance in non-cyclical consumer companies listed on the IDX during the 2020 - 2022 period.

Menganalisis Rasio terhadap Laporan Keuangan pada PT. Unilever Indonesia Tbk

This research aims to analyze the financial performance of PT. Unilever Indonesia Tbk during the period of 2022-2023 using financial ratios. The method used is the analysis of liquidity, solvency, and profitability ratios towards the company's financial statements. The results show that in terms of liquidity, the company's ability to meet short-term obligations is still poor and tends to deteriorate. Meanwhile, the company's leverage level is quite high, exceeding industry standards. However, in terms of profitability, the performance of PT Unilever Indonesia is quite encouraging with profit margin, return on investment, and return on equity ratios above industry standards. Overall, despite its high profitability, the company needs to improve its liquidity and capital structure to maintain long-term business continuity.

ADVANCED BUSINESS ANALYTICS IN TEXTILE & FASHION INDUSTRIES: DRIVING INNOVATION AND SUSTAINABLE GROWTH

This research paper explores the strategic implementation of advanced business analytics within EcoFashions Ltd., a mid-sized company in the textile and fashion industry. The central question it addresses is: How can a specific company leverage advanced analytics in the fashion sector for sustainable growth? Through a qualitative case study approach, the research examines the strategic implementation of analytics at EcoFashions to enhance operational efficiency, drive innovation, and promote sustainability. The findings reveal that the integration of analytics at EcoFashions led to a 25% reduction in material waste and a 15% increase in production efficiency, while also fostering product innovation responsive to market trends. These outcomes not only highlight the potential of business analytics to transform traditional practices within the fashion industry but also suggest that other firms can adopt similar strategies to achieve substantial improvements in sustainability and operational performance. The paper concludes with reflections on the limitations of a single case study and proposes directions for future research to validate and expand upon these findings across the broader industry. This study contributes to understanding how data-driven strategies can facilitate significant sector-wide advancements in sustainability and innovation in the textile and fashion industries.

Does the leverage of a company differ when led by a CEO from a reputable university?

This study investigates the influence of the educational background of Chief Executive Officers (CEOs) from reputable universities on corporate leverage. Company leverage is an important financial policy that determines a company’s success. A review grounded in upper echelons theory indicates a correlation among CEO characteristics, strategic decisions, and corporate outcomes, with financial leverage serving as the representation in this study. The study was conducted on top-rated Environmental, Social, and Governance (ESG) companies in Southeast Asia during 2020–2022 using 1108 observations. Data were obtained from annual reports, company websites, and Refinitiv, and analyzed using regression. The results indicate that CEOs with an educational background from reputable universities tend to have lower leverage. This suggests that CEOs from prestigious universities tend to exhibit risk-averse tendencies when formulating or executing company debt policies. This study contributes to the literature on the correlation between CEO educational backgrounds and firms’ leverage, providing insight into the relationship between CEOs from reputable universities and the level of corporate leverage. It is also expected to contribute to the development of Upper Echelons Theory and the implementation of company policies such as CEO qualifications, CEO recruitment, and debt policy.

STRATEGIC TIMING: ANALYZING MARKET TIMING STRATEGIES FOR NON-FINANCIAL COMPANIES' LEVERAGE

This study investigates the impact of market timing strategies on the leverage of non-financial companies. Market timing involves making financial decisions based on expectations of future market movements. Using a sample of non-financial firms, we examine how companies strategically time their debt issuance and repayment activities in response to market conditions. Our analysis considers factors such as interest rate fluctuations, market volatility, and economic cycles. We employ quantitative methods to assess the effectiveness of different market timing strategies in influencing firms' leverage levels. The findings shed light on the dynamics between market conditions and corporate leverage decisions, providing valuable insights for financial managers, investors, and policymakers.

Does Fintech merger and acquisition change a firm's financial statement?

AbstractThrough a comprehensive analysis of United States public firms, we explore the implications of mergers and acquisitions within the Financial Technology (Fintech) sector on a company's value and capital structure. The financial statements of financial institutions engaged in Fintech mergers and acquisitions differ significantly from those of other nonfinancial institutions involved in various high‐technology acquisitions. Our results indicate that when a financial company acquires a Fintech firm, it enhances the acquirer's overall firm value and cash holdings. Furthermore, these mergers and acquisitions within the high‐technology sector exert distinct influences on a company's leverage and cash flow.

Deleveraging and green technology innovation: Evidence from Chinese listed companies

To address the relationship between 'deleveraging' and 'green development transformation', it is necessary to seek a leverage ratio that promotes green technology innovation and avoids financial risk. Using fixed-effects models, this study empirically examines the influence of a company's leverage ratio on green technology innovation based on the annual data of Chinese listed companies from 2007 to 2022. The results show that: (1) there is an inverted U-shaped relationship between the leverage ratio and green technology innovation, with a turning point of 51.79%; (2) Short-term leverage has a more noticeable effect on green technology innovation than long-term leverage. Commercial credit promotes green technology innovation, while bank lending has been proven to damage green technology innovation; (3) There are distinct heterogeneous effects of company’s leverage on green technology innovation among Chinese listed companies owing to ownership, scale, and industry; (4) Leverage affects green technology innovation through R&D investment and financial distress.

BEBERAPA FAKTOR YANG MEMPENGARUHI KEBIJAKAN UTANG

Leverage is an alternative source of financing from outside the company which can offer advantages and disadvantages for the company. The purpose of This research is to analyze the impact of independent variables such as profitability, fixed tangible assets, liquidity, company size, and opportunities growth on company leverage. Trade-off theory is used in research. This is to explain the condition of the company's overall capital structure using debt. Profitability is the ability of a company to do to generate profits over a certain period at the level of sales, assets, and share capital certain. Tangible fixed assets are tangible assets with a useful life of more than one year. Liquidity is the degree to which an asset can be easily converted into money. Company size is a way to group the scale of a company seen from the size of the company. Growth opportunity is an opportunity future growth of a company. This research will use manufacturing companies that have been registered on the BEI (Indonesian Stock Exchange) for the 2019 period 2021 as an object. Based on the t test, the Sig value is obtained. for X1: 0.285, X2: 0.077, X3: 0.000, X4: 0.064, X5: 0.002. The coefficient results from the t test show the value of X1: 0.097, X2: 0.210, X3: -0.184, X4: -0.006, X5: 0.270. Results of the coefficient of determination for the research model shows a value of 0.501. The conclusions obtained in this research are it is not proven that profitability, tangible fixed assets, and company size have influence on leverage. There is evidence that liquidity has a negative effect on leverage and growth opportunities have a positive effect on leverage.

Factors Affecting Stock Returns with Corporate Social Responsibility as a Moderating Variable in Real Estate Property and Building Construction Companies Listed on the Indonesian Stock Exchange

This research aims to determine and analyze the influence of Return on Assets, cash flow from funding activities, the age of company, leverage, and the proportion of independent board of commissioners simultaneously and partially on stock returns in Property, Real Estate, and Building Construction companies listed on the Indonesia Stock Exchange. CSR Disclosure as a moderating variable strengthens or weakens the relationship between Return on Assets, Cash Flow from funding activities, Leverage, the company age, and the proportion of independent board of commissioners with stock returns in Property, Real Estate, and Building Construction companies listed on the Indonesia Stock Exchange. The population of this research is 51 Property, Real Estate, and Building Construction companies listed on the Indonesia Stock Exchange from 2018 - 2022. The sample was selected using purposive sampling, totaling 35 companies with 155 analysis units. Data were processed using a panel data regression as the analysis model for the first hypothesis and residual testing for moderating variables using STATA. The results of this research prove the first hypothesis that simultaneous and partial return on assets, cash flow from funding activities, the age of company leverage, and the proportion of independent boards of commissioners have a significant effect on stock returns. The results of the moderation test research state that CSR Disclosure does not moderate the relationship between return on assets, cash flow from funding activities, leverage, the company age, and the proportion of independent board of commissioners with stock returns Keywords: return on assets, cash flow from funding activities, leverage, the company age and proportion of board of commissioners, CSR disclosure, and stock returns.

THE EFFECT OF TAX AVOIDANCE, PROFITABILITY, AND LEVERAGE ON DIVIDEND POLICY: LIQUIDITY AS MODERATING VARIABLE

This study examines the effect of tax avoidance, profitability, and leverage in dividend policy; this case study was conducted at IDX80. IDX80 is a list created by the Indonesian stock exchange where this index measures the price performance of 80 stocks with high liquidity and large market capitalization. This research was conducted in 2018 - 2021, using a purposive sample method; 96 samples were obtained. The results of this study indicate that tax avoidance does not affect the company's dividend policy, while profitability and leverage affect dividend policy. Legal tax avoidance by the company does not have a direct effect on the company's dividend policy. So, even though the company practices tax avoidance, this will not have a significant effect on the decision to distribute dividends. Profitability has a positive and significant impact on dividend policy, which means that if the company's profitability increases, the dividend policy will also increase. Then leverage has a negative and significant effect on dividend policy, which means that when the company's leverage is high, the dividends distributed by the company will decrease. Then, this study uses liquidity as a moderating variable, showing that liquidity moderates the relationship between profitability and dividend policy. In contrast, high liquidity can weaken the relationship between profitability and dividend policy.

Leverage and profitability of newspaper publishers: A financial analysis of the portuguese industry (2008-2019)

As is the case with any economic activity, the challenge of guaranteeing the economic and financial sustainability of the newspaper industry is recurrent, and the challenge is redoubled in periods of industry transformation, as has occurred in the media business, where there are various levels of disruption, particularly in terms of the financing model (insufficient traditional sources of revenue: reader revenue and advertiser revenue) and forms of product access and distribution (insufficient physical support and newsstands). The migration to digital media necessarily implies new management strategies and practices in order to optimize costs and diversify the revenues that can be earned by newspaper companies. In this context, this article examines the recent evolution of the financial profitability of the newspaper publishers in Portugal. Financial profitability depends on both the economic profitability and the financial structure (i.e., leverage) of companies. Newspaper companies accumulated very high levels of debt because of the sector crisis. The financial analysis in this article reveals that almost a half of newspaper publishers benefited from positive leverage effects, recording higher financial profitability than economic profitability. Companies that benefited from positive leverage effects were the more leveraged. High leverage was positive for those newspaper companies that made investments whose returns offset their debt costs.

Determinants of Profitability of Insurance Companies in Nepal

The ability of a corporation to turn a profit from all of its business endeavors is expressed by its profitability. It demonstrates how well management uses all available resources to generate profit. This study attempts to investigate the determinants of profitability of insurance companies in Nepal. This study is based on secondary data of 15 sample insurance companies using convenient sampling and it covers the period 2016/17 to 2020/21 with 75 observations. The results of this study revealed that expense ratio, financial leverage, claim ratio and size of company have impact on profitability of the insurance companies in Nepal. Expense ratio and claim ratio have significant negative and financial leverage and size of company have positive impact on profitability of the insurance companies in Nepal. This study also revealed the insignificant effect of age on profitability of insurance companies.