THESIS
THE EFFECT OF CURRENT RATIO, DEBT TO EQUITY RATIO, RETURN ON INVESTMENT, AND SALES GROWTH ON DIVIDEND
PAYOUT RATIO ON CONSUMER GOODS COMPANIES LISTED ON TADAWUL FOR THE 2019-2021 PERIOD
Submitted to fulfill the Requirements to Get a Bachelor’s Degree in Economics from
Narotama University Surabaya
BY:
MOHAMMED ABDULLAH SALEM BAHBRY NIM: 01218183
MANAGEMENT STUDY PROGRAM
FACULTY OF LAW, ECONOMICS AND EDUCATION NAROTAMA UNIVERSITY
SURABAYA
2022
ii
iii
ii
iii
iv
v
FOREWORD
Alhamdulillah, Praise and Gratitude is extended to the presence of Allah SWT, because of the mercy and grace that Allah has given, I was able to complete the preparation of the thesis entitled.
This thesis proposal is submitted to fulfill and complete one of the graduation requirements in achieving a bachelor's degree (S-1) Faculty of Economics and Business, Narotama University.
In preparing this thesis proposal, I realize that the success and implementation of this research is not an individual success. Therefore, I would like to express my sincere gratitude to all parties who have provided assistance, encouragement, and prayers so that this thesis can be completed properly. My thanks go to:
1. My parents who always give me prayers, blessings, support, and love which means a lot to me.
2. My self who generally gives me supplications, gifts, backing, and love which means a great lots to me.
3. My brothers and my sisters who generally give me prayers, gifts, and love which implies a ton to me 4. Mrs. Dr. Ir. Sri Wiwoho Mudjanarko ST., MT., IPM. As Chancellor of Narotama University Surabaya.
5. Mr. Dr.Rusdianto Sesung, SH., MH. As the Dean of the Faculty of Law, Economics and Education, Narotama University, Surabaya.
6. Mr.I Putu Artaya, SE. MM. as the Head of the Management Study Program at Narotama University Surabaya.
7. Ms. Ani Wulandari SS., MM. As a supervisor who has sacrificed time, energy, thoughts to guide and provide advice in completing this thesis proposal.
8. Mr / Mrs Lecturers, staff, employees at Narotama University Surabaya, who have helped me a lot in completing my thesis proposal.
9 . My friends: A l k h a d a i d , Ebrahim who have given encouragement and encouragement in the process of completing this thesis.
10. Colleagues of Management Study Program at Narotama University Class of 2018 who also provided advice and support that helped me in completing my thesis proposal.
11. All parties who cannot be mentioned one by one, who have provided assistance to me in the process of compiling a thesis proposal.
Finally, may Allah SWT always bestow His grace and gifts to repay the kindness of all those who have helped me so far. Hopefully this thesis is useful for all parties.
Surabaya, 20 AGUSTUS 2022
vi
LIST OF CONTENTS
FOREWORD ... v
LIST OF CONTENTS ... vi
LIST OF TABLES ... viii
LIST OF FIGURES ... ix
ABSTRACT ... x
CHAPTER 1 ... 11
INTRODUCTION ... 11
1.1 Background... 11
1.2 Statement of the Problem ... 12
1.3. Research purposes ... 12
1.4. Benefits of research ... 13
1.5. Research Limitation ... 13
CHAPTER II ... 14
LITERATURE REVIEW ... 14
2.1. Previous Research ... 14
2.2 Theoretical Framework ... 33
2.2.1. Saudi Stock Exchange (Tadawul) ... 33
2.2.2.Signaling Theory ... 34
2.2.3 Current Ratio ... 34
2.2.4 Debt to Equity Ratio ... 36
2.2.5 Return on Investment ... 38
2.2.6. Sales Growth ... 40
2.2.7 Dividend Payout Ratio ... 41
2.3. Empirical Overview... 42
2.4. Research Hypothesis ... 50
2.4.1 The Effect Current Ratio on Dividend Payout Ratio ... 50
2.4.2 The Effect Debt-To-Equity Ratio on Dividend Payout Ratio ... 50
2.4.3 The Effect Return on Investment on Dividend Payout Ratio ... 50
2.4.5The Effect of Sales Growth on Dividend Payout Ratio ... 51
2.4.6 The Effect of Current Ratio, Debt-To-Equity Ratio, Return on Investment, and Sales Growth Simultaneously on the Dividend Payout Ratio ... 51
CHAPTER III ... 52
RESEARCH METHODOLOGY ... 52
3.1. Research Approach ... 52
3.2. Research Strategy ... 52
vii
3.3. Object of research ... 52
3.4. Population and Sample ... 53
3.5. Types, Sources, and Techniques of Data Collection ... 56
3.5.1. Data Type ... 56
3.5.2. Data source ... 56
3.5.3. Data collection technique ... 56
3.6. Operational definition ... 56
3.6.1. Current Ratio(X1)... 56
3.6.2. Debt to Equity Ratio(X2) ... 57
3.6.3. Return on Investment (X3) ... 57
3.6.4. Sales Growth(X4) ... 57
3.6.5. Dividend Payout Ratio(Y)... 58
3.7 Data Analysis Methods ... 58
3.7.1 Traditional Assumption Test ... 58
3.7.2 Multiple linear regression ... 60
3.7.3 Hypothesis testing ... 61
CHAPTER IV... 62
RESEARCH RESULTS AND DISCUSSION ... 62
4.1. Description of Research Results ... 62
4.2. Analysis and Hypothesis Testing ... 63
4.2.1. Classical Assumption Test: Normality Test ... 63
4.2.2. Classical Assumption Test: Multicollinearity Test ... 64
4.2.3. Classical Assumption Test: Heteroscedasticity Test ... 65
4.2.4. Classical Assumption Test: Autocorrelation Test ... 66
4.3. Multiple Linear Regression Analysis ... 66
4.3.1. Simultaneous Test ... 67
4.3.2. Hypothesis test ... 68
4.4. Discussion ... 69
CHAPTER V... 71
CONCLUSIONS AND RECOMMENDATIONS ... 71
5.1. Conclusion ... 71
5.2 Suggestion ... 71
References ... 72
viii
LIST OF TABLES
Table 1 Previous Research on International Journals ... 17
Table 2 Previous Research on National Journals ... 25
Table 3 Past Research Matrix ... 46
Table 4 List of Financial Sector Companies of TADAWUL ... 53
Table 5 Description of Research Variables ... 62
Table 6 Normality Test Results ... 63
Table 7 VIF Results ... 64
Table 8 Spearman Rank Correlation ... 65
Table 9 Breusch-Godfrey Correlation (LM Test) ... 66
Table 10 Multiple Linear Regression Equation... 66
Table 11 F .Test Results ... 67
Table 12 R2 Value (Coefficient of Determination) ... 68
Table 13 T test results ... 68
ix
LIST OF FIGURES
Figure 1 Frame of Thought ... 49 Figure 2 Normality test ... 64 Figure 3 Scatterplot ... 65
x
ABSTRACT
The study is aimed to analyze the effect of The Effect of Current Ratio, Debt to Equity Ratio, Return on Investment, And Sales Growth On Dividend Payout Ratio On Consumer Goods Companies Listed On Tadawul.
The population of this study is all manufacturing companies in the consumer goods industry listed on the TADAWUL from 2019 to 2021, totaling 192 companies. The sample that was determined based on the purposive sampling method was 38 companies. The data analysis technique used is multiple linear regression analysis using the SPSS program. The results showed that The Current Ratio has no significant effect on the Dividend Payout Ratio, the Debt to Equity Ratio has a significant effect on the Dividend Payout Ratio, the Return on Investment has a significant effect on the Dividend Payout Ratio, Sales Growth the has a significant effect on the Dividend Payout Ratio. Key words: Current Ration, Debt TO Equity Ratio, Return on Investment, Sales Growth, Dividend Payout.
Key words: Current Ration, Debt TO Equity Ratio, Return on Investment, Sales Growth, Dividend Payout.
