Term Debt Research Articles

Faktor-faktor yang mempengaruhi struktur modal pada perusahaan farmasi yang terdaftar di BEI periode 2015-2020

This study aims to determine the effect of Net Profit Margin, Current ratio , Growth Asset, Firm Size Sales, Assset Structure, and covid-19 condition (dummy) on the Capital Structure (Long Term Debt Equity) in manufacturing companies in the pharmaceutical sub-sector on the IDX for the 2015-2020 period. Using a sampling technique with purposive sampling and obtained 8 issuers with a research period of 6 years (quarters), and the total sample data is 192. The method of analysis in this study is panel data regression. The results of this study indicate that simultaneously the NPM, CR, GA, FZS, AS, and Dummy influence the long-term debt equity (LTDER). Result from GA, AS, and Dummy partially have a significant positive effect on long-term debt equity. While the NPM, CR, and FZS partially have a significant negative influence on long-term debt equity.

The Effect of Capital Structure on the Performance of Marginal Oil Fields in Nigeria

Marginal fields are pivotal to wealth creation and indigenous participation in the oil and gas industry. Despite the potential role of marginal fields in economic growth, indigenous operators are confronted with financing fields development. This study examined the relationship between capital structure and performance of producing marginal oil fields in Nigeria. Ten fields operated by five companies were empirically investigated between 2011 and 2021. Firm’s performance indicators are accounting-based measurement namely, Return on Asset (ROA) and Return on Equity (ROE). Capital structure measures are equity, long term debt and short-term debt. Panel Corrected standard errors regression technique was employed to analyse time series cross sectional data. Findings indicate that there was a significant positive relationship between equity and performance of Marginal fields in Nigeria. These corroborate Pecking order theory that firms use retained earnings first, then debts. Long term debt and short-term debt show negative relationship with marginal field operators’ performance. This could be attributed to the high cost of borrowing in Nigeria and the unwillingness of local banks to grant loans without adequate collateral.

The Effect of Short-Term Debt on Profitability among Deposit-Taking Microfinance Institutions. A Critical Literature Review

Purpose: Very few deposit-taking microfinances institutions are profitable. Most of them report loses in every financial year. The making of the losses may be a result of inefficiency in short term debts. The overall objective of this study was to examine influence of equity financing on the growth of micro, small and medium enterprises.
 Methodology: The paper used a desk study review methodology where relevant empirical literature was reviewed to identify main themes and to extract knowledge gaps.
 Findings: From the findings of the study, the study concludes that short term debt had a positive and significant association on the profitability of the deposit-taking microfinance. The study also concludes that short term debt has a positive and significant relationship on the profitability of the deposit-taking microfinance. This means that profitability would increase with a proportionate increase in in the level of the short-term debt when all other factors affecting the profitability of the organizations are held constant. The study showed that when the company borrows, availability of sufficient funds to finance the available assets of the company, which in return improves in the level of performance.
 Unique Contribution to Theory, Policy and Practice: Based on the coefficients of determination, the study recommends that policymakers in the microfinance institutions should use short term debt for the financing of the activities. The cost of the short-term debts is minimal and generally offers lower interest charges, and most lenders do not charge interest until all credit allowance period is breached and therefore becomes useful for companies

Pengaruh Kebijakan Hutang Jangka Panjang Terhadap Kinerja Keuangan Pada Perusahaan Property Dan Real Estate Yang Terdaftar Di Bursa Efek Indonesia Tahun 2018-2019

This study aims to test whether long-term debt and total debt affect the financial performance of publicly traded companies listed on the Indonesia Stock Exchange in 2019 as measured by Return On Equity. This type of research is quantitative research with the data used is data in the form of numbers. which was compiled based on existing sources in the financial statements of property and real estate companies listed on the Indonesia Stock Exchange in 2018-2019. Research data analysis was carried out using quantitative data analysis by testing instrument requirements, analysis requirements and hypotheses. The results showed that simultaneously Long Term Debt, Total Debt did not have a significant effect on Return On Equity in Go Public Sector and Real Estate Companies listed on the Indonesia Stock Exchange for the 2018-2019 period. Keyword: Long Term Debt Policy, Financial Performance

First-Order Determinants of Capital Structure among Listed Manufacturing Companies in the United States of America

Capital structure plays a critical role which enables manufacturing firms address the dilemma of whether or not an optimal capital structure can be achieved. The total capital of a firm is composed of both debt and equity which makes up firm’s capital structure. The capital structure of manufacturing firms is made up of a combination of internal financing and external financing of the firm. Internal financing composed of equity, preference share capital and shareholder's funds and external financing composed of long term debt and short term debt of the firm. Internal financing using profits as a source of capital for new investment rather than obtaining capital elsewhere distributed as dividends to firm's owners or other investors. External financing is the phrase used to describe funds that firms obtain from outside of the firm. The decade since the onset of the global financial crisis has brought about significant structural changes in the manufacturing sector in USA. This study thus sought to assess the first-order determinants of capital structure among listed manufacturing companies in the United States of America through literature based study methodology. The study found that the manufacturing industry in USA is an industry that dominates companies listed on the New York Stock Exchange, it can be seen from the number of companies listed on NYSE increasing every period. The companies not only required to produce products, but also must be able to manage their capital structure. The study established that the first order determinants of capital structure for listed manufacturing firms in USA consist of financial situation, growth opportunities, size of the firm, product uniqueness, business risk, tax shields, dividend Policy. Furthermore, the first order determinants of capital structure consist of firm size, tangibility, growth opportunities, the non-debt tax shield, the bankruptcy risk, profitability and risk. The study concludes that listed manufacturing firms with the highest asset liquidity may increase debt capacity only when the bond covenants impose restrictions on the disposition of assets. The fact that a company possesses fixed assets to a large extent can be considered by its creditors as a guarantee that will allow them to recover their funds in the case of financial distress experienced by the borrower corporation. If a high-risk company is experiencing a decline in sales, the resulting profit will decrease due to the amount of the fixed costs. Because there is a decrease in profits, the company is not available enough funds to pay off the debt and interest so that it threatens the occurrence of bankruptcy. Keywords: First order determinants, capital structure, listed manufacturing companies, USA.

Faktor Yang Mempengaruhi Stock Price Volatility Perusahaan Pertambangan Di BEI (2015 – 2019)

This research aims to knowing the existence of dividend yield, dividend payout ratio, long term debt and earning volatility towards stock price volatility in mining companies listed on Indonesia Stock Exchange in 2015-2019. Samples selected by purposive sampling method and there are 9 companies of valid data. Data processing method using mutiple regression analysis through SPSS Program version 24 and Microsoft Excel 2013. The result of this reasearch shows that dividend yield gives positive significant influence towards stock price volatility, while dividend payout ratio, long term debt and earnings volatility have no influence towards stock price volatility. The aims of this research are to giving explaination and finding factors that affect stock price movements so it gives good signal to investors regarding factors that are important to consider in making investment decisions.

Analisis Rasio Likuiditas dan Solvabilitas pada Bank Muamalat Indonesia Periode 2019-2020

This article is about management of liquidity and solvability which discuss about the position of cash money in the company and its ability to fulfill the obligation (pay the debt) on time. The likuidity analysis consist of Current Ratio,Quick Rasio,Cash Rasio. While the solvability analysis includes: DAR (debt to asset ratio), DER (debt to equity ratio), LTDER ( long term debt to equity ratio). Management of liquidity and solvability is one of the essential function which is done by banking institution and inside its efficient management, is needed instrument and finance market which is taking not only short term but also long term, and not only conventional banking but also syariat. Through that natural necessity (placement and fulfillment of short term need), for Islamic banking in Indonesia has been availabled some instruments such as (IMA) certificate of Mudhorobah Investment between bank, (PUAS) market banking regulations between syariat bank, (SWBI) Bank of Indonesia Wadiah certificate, (FPJPS) provision about short term cost facility for Islamic banks.

Importance of Current Ratio and Dividend Yield Ratio in Moderating Process on Stock Prices

This study aims to determine the influence of Gross Profit Margin, Receivable Turn Over and Long Term Debt to Equity Ratio on Stock Price with Current Ratio and Dividen Yield Ratio as moderating variables. This study used the object of the Batubara subsector company on the Southeast Asian Stock Exchange for the period 2012-2020. The data collected is secondary data with documentation methods in the form of company annual reports. The analysis tool used to test hypotheses is the IBM SPPS V26. The sampling method used in this study using purposive sampling techniques was obtained by 9 companies that presented complete financial statements, so that 81 samples were obtained. The analytical techniques used are deskriptif statistical analysis, classical assumption test, moderated regression analysis (MRA), multiple linear regression, t test test, and f test. The results of the study partially concluded that Gross Profit Margin has no significant effect on Stock Price, Receivable Turn Over has a significant effect on Stock Price and Long Term Debt to Equity Ratio has no significant effect on Stock price. The results of the study simultaneously showed that the value of Fcount 13,962 and Ftable 2,72 means that Fcount > Ftable or a significant value of 0,000<0,05. So far, Gross Profit Margin, Receivable Turn Over and Long Term Debt to Equity Ratio simultaneously have a significant effect on Stock Prices. The results of moderately regression analysis (MRA) research show that Current Ratio does not moderate Gross Profit Margin to Stock Prices, Current Ratio does moderate Receivable Turn Over to Stock Price and Current Ratio does not moderate Long Term Debt to Equity Ratio on Stock Prices, Dividen Yield Ratio does not moderate Gross Profit Margin to Stock Prices, Dividen Yield Ratio does moderate Receivable Turn Over to Stock Price and Dividen Yield Ratio does not moderate Long Term Debt to Equity Ratio on Stock Prices.

Analisis Faktor Rasio Keuangan Sebagai Indikator Unqualified Opinion Pada BUMN Peraih Indonesia Good Corporate Governance Award 2017

This study aims to analyze the factors that underlie the auditor's considerations in providing an Unqualified Opinion on BUMN Tbk companies that won the Indonesia Good Corporate Governance Award 2017. This descriptive quantitative research uses exploratory factor analysis. The results of the study show that the financial ratios used as indicators in providing Unqualified Audit Opinions to BUMN Tbk companies that won the 2017 Indonesia Good Corporate Governance Award are the Liquidity Ratio and Solvency Ratio. The Liquidity Ratio used is the Current Ratio, Quick Ratio and Cash Ratio. Meanwhile, the Solvency Ratios used are Total Debt to Total Assets Ratio, Debt to Equity Ratio, Owner`s Equity to Total Assets Ratio, Owner`s Equity to Fixed Assets Ratio, Fixed Assets to Long Term Debt Ratio and Times Interest Earned Ratio. The indicators that are factors in giving the auditor's opinion are divided into 3 (three) main factors, namely the company's ability to fulfill its obligations both short and long term (Factor 1) is the main consideration of 65.383% in providing an Unqualified audit opinion, the balance factor of debt and equity (Factor 2) and the importance of the source of loan capital and the level of security owned by creditors (Factor 3) with a consideration value of 12.417% and 11.243%, respectively.

Capital Structure, Investment Decision and Financial Performance of SMEs in Uganda

The paper explored the relationship between capital structure, investment decision and financial performance of SMEs in Uganda a case of Central Uganda. The study adopted a descriptive, cross-sectional and correlational design. The sample size was 226 SMEs in Central Uganda. The findings point to a moderate significant positive relationship between capital structure, investment decision and financial performance of SMEs. Capital structure and financial performance of SMEs (r = 0.642, P-value = 0.000), investment decision and financial performance of SMEs (r = 0.488, P-value = 0.000). From the results, we confirm that capital structure, investment decision, predict up to 66.2% of the change in financial performance of Small and Medium Enterprises in Central Uganda. The results show good model fits and fig.2 defines the model of capital structure and investment decisions on financial performance of SMEs in Uganda and is encompassed of 4 proportions of capital structure in terms of Equity, Long term Debt, Short term debt as well as investment decisions and their predictive power on financial performance of SMEs in Uganda. Figure 2 and table 1 and 2 clearly indicate that capital structure and investment decisions are significantly associated with return on assets (ROA) which in turn leads to improved financial performance. The study recommends an appropriate mix of capital structure coupled with premeditated investment decisions so as to have improved financial performance of SMEs in Uganda. The current study underwrites to academic research by providing empirical proof to support theories pertinent to the elucidation of financial performance. The study was anchored on Pecking Order theory together with Modigliani&Miller theory and the results depict the behaviours that managers have while making decisions concerning capital structure and investment decisions. With such, the precursors of capital structure, investment decisions on financial performance of SMEs in Uganda and other related developing countries has been revealed.

ANALYSIS OF THE EFFECT OF LONG TERM DEBT, SHORT TERM DEBT, TOTAL DEBT ON FINANCIAL PERFORMANCE IN MANUFACTURING COMPANIES LISTED ON THE IDX

This research aims to investigate the effect of Long Term Debt, Short Term Debt, and Total Debt on Return on Equity (ROE) in manufacturing companies listed on the Indonesia Stock Exchange (BEI). The data used are the company's annual financial reports for the period 2018 - 2020. The panel regression analysis method is used to evaluate the relationship between long-term debt, short-term debt, and total debt variables with the company's ROE. The research results show that Long Term Debt has a negative and significant influence on ROE, indicating that the use of long term debt can reduce the rate of return on a company's own capital. On the other hand, Short Term Debt does not have a significant effect on ROE. However, Total Debt shows a negative and significant influence on ROE, indicating that too much dependence on debt can reduce the company's rate of return on its own capital. These findings provide valuable insights for company management in managing their capital structure to achieve optimal profit levels.

Evidence on the Existence of Inter-industry Differences in Capital Structure of Leading Indian Companies

The objective of this paper is to provide additional evidence on the inter industry differences in the Capital Structure of leading Indian companies in terms of market capitalization. Comparisons in the capital structure of 15 industrial groups namely Pharmaceutical, Non-Metallic Mineral Products, Power, Electric Equipment, Automotive, Chemical, Construction, Information Technology, Food-Beverages-Tobacco-Alcohol, Consumer Goods, Textile, Service, Metal, Retail/Wholesale and Others identified from 333 companies are made using three gearing ratios i.e. Total Debt to Net Worth ratio (TDNW), Long Term Debt to Net Worth ratio (LTDNW), Short Term Debt to Net Worth ratio (STDNW). One way ANOVA and Post hoc tests are employed for statistical analysis. Construction and Textile industries have a higher level of debt in their capital structure. However, Information Technology and Service industries are identified as least levered ones. Overall, the finding indicates IT and Service industry to be significantly different from other industry groups in case of all the debt ratios.

PENGARUH DEBT TO EQUITY RATIO (DER), DEBT TO TOTAL ASSET RATIO (DAR), LONG TERM DEBT TO EQUITY RATIO (LDER) DAN LONG TERM DEBT TO TOTAL ASSET RATIO (LDAR) TERHADAP PROFITABILITAS ROE PADA PERUSAHAAN FOOD AND BEVERAGES YangTerdaftar Di Bursa Efek Indonesia

Research on Determined the Effect of Debt To Equity Ratio (Der), Debt To Total Asets Ratio (Dar), Long Term Debt To Euity Ratio (Lder) and Long Term Debt To Total Asets Ratyo (Ldar) Towards Profitabilty Roe In Food And Beverae Companies (Case Study In Food And Bevrage Sector Company List On The Indonesia Stock Exchange Period 2015-2019) . The population in this study were 23 companies and the sampling technique was purposive sampling method. The sample is 13 companies and obtained 65 observational data. The results that there was a positive and significant effect between DER on ROE Profitability. There was no positivie and significant effect between DAR and ROE Profitability. There is a negative and significant effect between LDER and ROE Profitability. There is no positiv and signficant effect between LDAR and ROE profitability. There is a positive and significant effect between DER, DAR, LDER, LDAR simultaneously on ROE Profitability.

The Effect of Debt on Earnings Per Share Using Manufacturing Companies in Nigeria from 2011 to 2021

This research work analyzed the effect of debt on earnings per share using manufacturing companies in Nigeria from 2011 to 2021. The data for the study were obtained from the financial statements of these listed firms using purposive and stratified sampling procedures. Before conducting the analysis of the effect of debt on earnings per share using SPSS 28, the data used were examined to comply with basic assumptions of linearity, homogenity and outliners. The result obtained indicated that short term debt has no significant effect on earnings per share (p = 0.651, DW = 1.008, R=0.108). This outcome of this study is in disagreement with Sriyono & Fatmasari [1] which opined that short term debt enhances earning per share. Also the study found out that long term debt exert significant positive effect on earnings per share (p=0.025, DW=1.234, R=0.498). The findings is in line with Efuntade, Efuntade, & Akintola, [2]. Siyanbola, Olaoye, & Olurin [3] and Sriyono & Fatmasari [1] as they all suggest that long term debt increase earnings per share. Further findings from this research indicated that there is a significant effect of total debt on earnings per share (p=0.0194, DW= 1.064, R=0.303). This result is in tandem with Badruzaman [4], Efuntade, Efuntade, & Akintola, [2]. Siyanbola, Olaoye, & Olurin [3], Sriyono & Fatmasari [1] among others. This study concluded that while short term debt exert insignificant effect on earnings per share, long term debt and a mix of short term debt and long term debt do. This study further supports the Perking Order Theory which helps in explaining that management elects to finance their investment in the cheapest means available using options that better their lots.

The Effect of Access to the Public Debt Market on Corporate Financing Decisions: The Case of REITs

We examined the effects of access to public debt on the corporate financing decisions in real estate investment trusts (REITs) using a difference-in-differences approach and a propensity score approach. The introduction of credit ratings by S&P and Moody’s has allowed REITs to access the public debt market. To investigate the impacts of the introduction of credit ratings, we compared the financing policies in REITs with initial credit ratings before and after the introduction of credit ratings with REITs that had not obtained a credit rating between 1980 and 2016. After obtaining credit ratings, REITs have significantly increased the corporate leverage ratios and the use of long term debt, which suggest that REITs were constrained from debt financing, in particular long term debt financing, in the past until they could gain access to the public debt market after the introduction of credit ratings. Access to the public debt market has also significantly reduced both equity issuances and cash holdings. Our empirical results suggest that the introduction of credit ratings can reduce information asymmetry, and affect REITs’ capital structure decisions and the level of cash holdings.

CAPITAL STRUCTURE AND FIRM PERFORMANCE OF LISTED MANUFACTURING FIRMS IN NIGERIA STOCK EXCHANCE

This research studied the link between capital structure and financial performance of Nigerian manufacturers. It evaluated the nexus between total debt and financial performance of listed manufacturing companies in Nigeria, the nexus between equity and financial performance of listed manufacturing firms in Nigeria.Stock Exchange.The study used ex-post-facto data to investigate variable relationships. Nigerian manufacturing firms were studied. The data was taken from the company's (2005-2020). Both descriptive and inferential statistics, such as Pearson correlation and panel regression, were used to examine the data.Return on equity, equity capital has a substantial influence on the performance of Nigerian manufacturing companies. 6.34 and 0.26 Total debt assessed by asset debt-to-equity ratio has no influence on stock market performance (p>0.6580). Sand return on equity has a positive significant influence on financial performance of Nigerian manufacturing firms by 6.331 (p=0.0000.05) and 0.117 (p=0.0070.05); long-term debt also has a positive significant effect.The study found that equity capital, total debt, and long-term debt have the potential to positively and significantly influence the financial performance of manufacturing firms in Nigeria, whereas short term debt has the potential to positively and insignificantly influence financial performance. Total asset has the potential to positively and significantly influence financial performance.

Asymmetric Information and Agency Cost of Financial Leverage and Corporate Investments: Evidence from Emerging South-East European Countries

In this paper, we investigated the impact of financial leverage on investment decisions on a sample of 811 firms from ten emerging South-Eastern European countries (Bosnia and Herzegovina, Bulgaria, Montenegro, Croatia, Greece, Romania, North Macedonia, Slovenia, Serbia and Turkey). We apply a panel regression model involving investment ratio as a dependent variable, leverage as independent variable, and control for several firm characteristics that closely determines the corporate investments. The results of the analysis show that leverage is negatively related to investment in the companies in SEE. But only long term debt has a stronger negative impact on investment for firms with low growth opportunities than for firms with high growth opportunities. These findings show supportive evidence of agency theories of corporate leverage, especially with the debt overhang theory, but did not give strong validation that leverage has a disciplining role for firms with low growth opportunities in SEE emerging markets. In addition to leverage, we found that corporate investments in the SEE countries decrease significantly with tangibility and the company size. Corporate investments in the SEE countries increase significantly with cash flow, sales, non-debt tax shield and profitability. Overall, the results slightly defer with those from the research on the case of developed markets.

Pengaruh Debt To Equity Ratio, Long Term Debt To Equity Ratio ,Return On Asset dan Volume Penjualan terhadap Harga Saham pada Industri Rokok yang Terdaftar di Bursa Efek Indonesia Periode 2015-2019

The purpose of this study is to analyze the influence of debt to equity ratio (DER), long tern debt to equity ratio (LTDR), return on asset (ROA) and simultaneous and parisal growth rate on stock prices in Industri Rokok Yang Terdaftar di Bursa Efek Indonesia Period 2015-2019. The Data used in this research is the annual financial statements such as the balance sheet and the profit and loss in Industri Rokok Yang Terdaftar di Bursa Efek Indonesia Period 2015-2019. The data source in this research is the official website of the Indonesian Stock exchange. This research used a multiple linear regression analysis tool used to figure out the direction of the relationship between the independen variable of the dependen variabel. Then, to answer the purpose of this research is used the F-test anf t-test and koefisien determinasi. Industri Rokok has a fairly good position in Indonesia, another reason related to the selection of research objects is the Cigarette Industry listed on the Indonesia Stock Exchange occupies the third position of the four manufacturing industries that are in demand by investors, it is because the Cigarette Industry listed on the Indonesia Stock Exchange has good prospects, judging from the basic needs needed by humans. Regression result of Y = 2,131 + 0,237 X1 + 0,034 X2 + 1,287 X3 – 0,174 X4 + e meaning is debt to equity ratio, long term debt equity ratio, return on asset and growth rate against the stock price of 42%. In other words, stock return variables can be explained or influenced by variables debt to equity ratio, long term debt equity ratio, return on asset and growth rate of 42%, while the remaining 58% is explained or influenced by other variables that are not studied. Simultaneously DER, LTDER, ROA, growth rate has a significant effect on the stock price. Partially DER, LTDER and growth rates have no effect on the stock price. Meanwhile, variable ROA has an effect on the stock price

Investigative Study of Economic Crisis in Sri Lanka

Abstract: This paper analyses the reasons and scenario of the current economic crisis in Sri Lanka. The study examines the possible reasons for the crisis, its ongoing impact on GDP, tourism industry, and on Sri Lankan rupee against other major currencies in the world. The paper shows that Forex reserves of Sri Lanka mainly depend on Tourism revenue, thus underscoring the importance of the tourism industry. But due to current circumstances of the Covid-19 and its severe impacts leads to a high decline in tourism revenue which ultimately affects the country’s reserves. This resulted in the high depreciation in the value of the Sri Lankan rupee against other major currencies in the world. To assess if the country has enough reserves, we have used the Guidotti - Greenspan rule and we found that since the Covid pandemic has begun, Sri Lanka has been unable to follow this rule and the ratio of reserves to short term debt is continuously decreasing. The external sector of Sri Lanka is also not performing well due to the sharp decline in exports. The IMF has approved a bailout package through its Special Drawing Rights to get over this crisis. Therefore, appropriate actions must be undertaken to overcome the crisis and revive the economy

ANALYSIS OF THE INFLUENCE OF DEBT POLICY ON FINANCIAL PERFORMANCE OF COMPANIES DELISTED ON IDX PERIOD OF 2018-2020

The purpose of the study was to examine the effect of debt policy onfinancial performance of listed firms in Indonesian Stock Exchange. Debt policymeasured by short term debt, long term debt,and total debt, while financialperformancemeasuredbyreturnonequity.Thisresearchusedtwocontrolvariables,namely, sizeand sales growth. This research was causal research with quantitativeapproach, while bythe level of it explanation, the research was associative research. The populationof the research included the company delisted in Indonesian Stock Exchange onmanufacturing sector during the 2018-2020 period. The purposive sampling wasused as sample collection technique for the research, and it was obtained 12companies. The method was used multiple regression analysis with two models.Model1wasregressionusingshorttermdebt,longtermdebt,andtotal debt, and model two was regression of independent variable. Short Term Debt had no effect on ROE. Long Term Debt had negativeandsignificanteffectonROE. Total Debt had negative andsignificant effect on ROE. The F test on model 1 was 6,833, and theF test model 2 was 5,022. Adjusted R2 of model 1 was 0,052 which means thatvariation of Return On Equity could be explained by Short Term Debt and LongTerm Debt of 5,2%, while the remaining 94,8% was explained by other variablesoutside themodel. Adjusted R2 of model 2 was 0,097 which means that variationofReturnOnEquitycouldbeexplainedbyTotalDebtof9,7%,whiletheremaining90,3%was explained byothervariables outsidethemodel. Keywords: Financial performance, debt policy, short term debt, long term debt, total debt, return on equity The purpose of the study was to examine the effect of debt policy onfinancial performance of listed firms in Indonesian Stock Exchange. Debt policymeasured by short term debt, long term debt,and total debt, while financialperformancemeasuredbyreturnonequity.Thisresearchusedtwocontrolvariables,namely, sizeand sales growth. This research was causal research with quantitativeapproach, while bythe level of it explanation, the research was associative research. The populationof the research included the company delisted in Indonesian Stock Exchange onmanufacturing sector during the 2018-2020 period. The purposive sampling wasused as sample collection technique for the research, and it was obtained 12companies. The method was used multiple regression analysis with two models.Model1wasregressionusingshorttermdebt,longtermdebt,andtotal debt, and model two was regression of independent variable. Short Term Debt had no effect on ROE. Long Term Debt had negativeandsignificanteffectonROE. Total Debt had negative andsignificant effect on ROE. The F test on model 1 was 6,833, and theF test model 2 was 5,022. Adjusted R2 of model 1 was 0,052 which means thatvariation of Return On Equity could be explained by Short Term Debt and LongTerm Debt of 5,2%, while the remaining 94,8% was explained by other variablesoutside themodel. Adjusted R2 of model 2 was 0,097 which means that variationofReturnOnEquitycouldbeexplainedbyTotalDebtof9,7%,whiletheremaining90,3%was explained byothervariables outsidethemodel. Keywords: Financial performance, debt policy, short term debt, long term debt, total debt, return on equity