Analysis of Factors Affecting Financial Performance and Managerial Ownership with Governance Moderation of Dividend Policy

Farhan Ady Pratama; Arry Eksandy; Lutfi Zulfa Mazida; Nia Anjani Syarafina

Authors

Farhan Ady Pratama Accounting Study Program, Pembangunan Jaya University
Arry Eksandy Accounting Study Program, Pembangunan Jaya University
Lutfi Zulfa Mazida Accounting Study Program, Pembangunan Jaya University
Nia Anjani Syarafina Accounting Study Program, Pembangunan Jaya University

Keywords:

Financial Performance, Managerial Ownership, Dividend Policy, Governance

Abstract

Financial performance and dividend policy are important factors that influence a company’s sustainability and investor confidence, particularly in the manufacturing sector during periods of economic uncertainty. The COVID-19 pandemic created operational disruptions, reduced purchasing power, and pressured corporate profitability, which consequently affected dividend distribution decisions. This study aims to analyze the relationship between financial performance, managerial ownership, and dividend policy in manufacturing companies. The research employed a quantitative approach using secondary data obtained from company financial statements. Financial performance was measured through profitability, liquidity, solvency, and efficiency ratios, including Return on Equity, Return on Assets, Net Profit Margin, Current Ratio, Quick Ratio, Debt-to-Equity Ratio, and Debt Service Coverage Ratio. The analysis was conducted to evaluate the company’s financial condition and its implications for dividend policy decisions. The findings indicate that strong financial performance encourages more consistent dividend distribution and strengthens shareholder confidence, while managerial ownership contributes to managerial decision-making related to dividend policy. The study concludes that companies need to maintain balanced financial strategies to achieve sustainable growth, preserve financial flexibility, and fulfill shareholder expectations in dynamic economic conditions.

References

E. F. Brigham and J. F. Houston, “Fundamentals of Financial Management: Concise by Cengage,” Cengage Learn., 2019.

N. G. Mankiw, Essentials of economics. Cengage learning, 2020.

M. Spence, “Job Market Signaling,” Q. J. Econ., vol. 87, no. 3, pp. 355–374, 1973.

P. and K. L. K. Kotler, Marketing Managemen, 15th ed. Pearson Education,Inc., 2016.

M. Kowerski and L. Haniewska, “The Miller–Modigliani dividend irrelevance theory as a warning for investors looking for quick profits from investments in companies paying dividends,” Financ. Internet Q., vol. 18, no. 4, pp. 77–88, 2022.

W. Astuti, R. Rinofah, and P. Primasari, “Pengaruh Profitabilitas, Struktur Aktiva, Dan Pertumbuhan Penjualan Terhadap Harga Saham Dengan Struktur Modal Sebagai Variabel Intervening Pada Perusahaan Manufaktur Sektor Industri Dasar Dan Kimia Yang Terdaftar Di Bursa Efek Indonesia (BEI) Pada Tahun,” J. Sos. Ekon. Bisnis, vol. 2, no. 2, pp. 93–105, 2022.

D. A. Nianty, A. R. Mus, B. Sinring, and R. Dewi, “The Effect Of Investment Decisions, Capital Structure, And Dividend Policy On Financial Performance And Company Value In Banking Companies Listed On The Indonesia Stock Exchange For The 2019-2021 Period,” Environ. Soc. Manag. Journal/Revista Gestão Soc. e Ambient., vol. 17, no. 6, 2023.

I. Pratiwi, A. N. Hanum, and N. Nurcahyono, “Pengaruh Earning Per Share, Total Assets Turnover, Pertumbuhan Penjualan dan Debt Equity Ratio Terhadap Harga Saham,” JAPP J. AKUNTANSI, Perpajak. DAN PORTOFOLIO, vol. 2, no. 2, 2022.

S. Purwaningsih, “The effect of profitability, sales growth and dividend policy on stock prices,” Asian J. Econ. Bus. Account., vol. 18, no. 3, pp. 13–21, 2020.

P. Kotler, K. Keller, M. Brady, M. Goodman, and T. Hansen, Marketing Management: 4th European Edition. Pearson UK, 2019.

H. K. Mohajan, “Quantitative research: A successful investigation in natural and social sciences,” J. Econ. Dev. Environ. people, vol. 9, no. 4, pp. 50–79, 2020.

Z. Iba and A. Wardhana, “Metode Penelitian (M. Pradana,” CV. Eureka Media Aksara, 2023.

S. Sugiyono, “Metodologi Penelitian Kualitatif Kuantitatif dan R&D,” Bandung. Cv. Alf., 2019.

A. T. Basuki, Y. Purwaningsih, and A. M. Susilo, “The Role of Local Government Expenditure on Economic Growth: A Review of Panel Data in Indonesia,” Humanit. Soc. Sci. Rev., vol. 7, no. 5, pp. 1293–1303, 2019.

R. Zulfikar and M. M. STp, “Estimation model and selection method of panel data regression: An overview of common effect, fixed effect, and random effect model,” JEMA J. Ilm. Bid. Akunt., vol. 9, no. 2, pp. 1–10, 2018.

C. J. Russell and P. Bobko, “Moderated regression analysis and Likert scales: Too coarse for comfort.,” J. Appl. Psychol., vol. 77, no. 3, p. 336, 1992.

F. M. Asiri, T. Sutrisno, and W. Andayani, “The influence of ownership structure and company characteristics of dividend policy with sales growth as moderation variable,” Asia J. Contemp. Business, Econ. Law, vol. 15, no. 5, pp. 252–260, 2018.

D. N. Gujarati, Essentials of econometrics. Sage Publications, 2021.

M. Ali, “Inflation, Interest and Exchange Rate Effect of the Stock Market Prices,” J. Bus. Econ. Options, vol. 1, no. 2, pp. 39–44, 2018.

F. A. Toisuta and S. Suwitho, “Pengaruh ROA, ROE, inflasi, dan kurs terhadap harga saham,” J. Ilmu dan Ris. Manaj., vol. 10, no. 3, 2021.

M. Ridlo, T. Yunianto, and I. A. Rohmah, “The effect of exchange rate, Jakarta Islamic Index (JII) and Indonesian Sharia Bank Certificate (SBIS) on Islamic mutual funds growth with inflation as a moderate variable,” Al-Amwal J. Ekon. dan Perbank. Syari’ah, vol. 13, no. 1, pp. 1–13, 2021.

F. M. Iqmal and I. G. Putra, “Macroeconomic factors and influence on stock return that impact the corporate values,” Int. J. Financ. Bank. Stud., vol. 9, no. 1, pp. 68–75, 2020.

S. T. Amanda, C. Akhyar, and R. N. Ilham, “The Effect of Inflation, Exchange Exchange, Interest Rate On Stock Price In The Transportation Sub-Sector, 2018-2020,” J. Account. Res. Util. Financ. Digit. Assets, vol. 1, no. 4, pp. 342–352, 2023.

R. E. Freeman, “47. Strategic Management: A Stakeholder Approach.” Pitman Publishing. London, 1984.

S. Nuridah, R. M. Sitohang, A. S. Sofura, and E. Sagitarius, “Effect of Sales Profitability and Growth on Stock Price,” J. Ekon., vol. 11, no. 03, pp. 1139–1146, 2022.

R. M. Magribi, N. Hernita, and R. N. Kusumadewi, “Asset Structure, Dividend Policy, and Sales Growth Influence on Stock Prices,” Int. J. Prof. Bus. Rev. Int. J. Prof. Bus. Rev., vol. 8, no. 7, p. 39, 2023.

J. F. McVea and R. E. Freeman, “A names-and-faces approach to stakeholder management: How focusing on stakeholders as individuals can bring ethics and entrepreneurial strategy together,” in R. Edward Freeman’s Selected Works on Stakeholder Theory and Business Ethics, Springer, 2023, pp. 197–215.