Vol. 10, No. 1, June 2020, pp. 59-64
ISSN: 2720-9830. 59
The Effect Of Net Profit And Operating Cash Flows On Dividend Policy On Manufacturing Companies Listed On The Indonesia Stock Exchange
Desy Marito Panjaitan Universitas Darma Agung
Article Info ABSTRACT
Article history:
Received April 2020 Revised May 2020 Accepted June 2020
This study aims to examine the effect of net income and operating cash flow on dividend policy in consumer goods manufacturing companies listed on the Indonesia Stock Exchange for the 2017-2019 period. The data method is carried out by using the library research method (Library Research) and the field research method (Field Research) where the data used by the researcher is the financial statements of each sample published through www.idx.co.id.
The study population was 50 companies with purposive sampling technique obtained 10 companies that became the research sample so that the total obtained was 30 data. The analysis technique used is multiple linear regression analysis using the SPSS version 22 program. Then the research trial using the t test and the F test. The results of the research partially show that the Net Profit variable has a significant effect on Dividend Policy (DPR) where the tcount is -2.520 <ttable 1.703, and the Operating Cash Flow variable has no effect on Dividend Policy (DPR) where the tcount is -1.239 <ttable 1.703. The results of the research simultaneously prove that Net Profit and Operating Cash Flow have a significant effect on Dividend Policy (DPR) in Manufacturing Companies in the Consumer Goods Sector in the Indonesia Stock Exchange where the value of Fcount 3.547> Ftable 3.35. The coefficient of determination (R2) shows a numerical value of 20.8% and the remaining 79.2%. By other variables that are not accurate in this study.
Keywords:
Dividend Policy Operating Cash Flow Net Profit
This is an open access article under the CC BY-SA license.
Corresponding Author:
Desy Marito Panjaitan Universitas Darma Agung
Email: [email protected]
INTRODUCTION
The Indonesia Stock Exchange (IDX) is a place for transactions that trade company shares. The Stock Exchange functions as an intermediary between parties who have excess funds and those who need funds. In addition, the Indonesia Stock Exchange also plays a role as a capital market participant.
In this era of globalization, the goods and mail industry is one of the most attractive industrial sectors. This is because consumer goods products are always needed in human life and definitely need them without being realized by humans. The consumer goods industry sub-sectors are the food and beverage industry, the cosmetic industry, the household use industry, the pharmaceutical industry, the cigarette industry, and the household appliances industry. One of the goals of a company is to get maximum profit. To achieve this goal, good management is needed with a high level of effectiveness. In this study, the authors influence as the object of research, namely food and beverage manufacturing companies listed on the Indonesian stock exchange.
For companies, the information contained in the Dividend Payout Ratio (DPR) is used as consideration in determining the amount of dividend distribution. Therefore, the company's dividend payout rate varies and depends on the discretion of each company.
Jurnal Ilmiah Socio Secretum, Vol. 10, No. 1, June 2020: 59-64
The phenomenon that occurs is that there are times when the profits earned by food and beverage companies decrease, the dividends given by the company are actually greater than the previous year. According to Airlangga Hartanto (Minister of Industry), the role of the food and beverage sector can be seen from its consistent and significant contribution to the gross domestic product of the non-oil and gas industry as well as increased investment realization. The Ministry of Industry noted that the food and beverage industry's contribution to the domestic product of the non-oil and gas industry reached 34.95% in the third quarter of 2017. This result made the food and beverage sector the largest contributor compared to other sub-sectors. In addition, this achievement increased by 4% compared to the period in 2016. Meanwhile, its contribution in the third quarter of 2017 was 6.21% or increased by 3.85% compared to the previous year period.
Scope of problem
Limitation of the problem needs to be done so that the discussion is more focused in accordance with the problems at hand. In this case the independent variable is net income and cash flow and the dependent is dividend policy on food and beverage manufacturing companies listed on the Indonesia Stock Exchange 2017- 2019.
Formulation of the problem
Based on the background described above, the formulation of the problem from this research is:
Does Net Profit partially affect the Dividend Policy in food and beverage manufacturing companies listed on the Indonesia Stock Exchange 2017-2019?
Does Operating Cash Flow partially affect the Dividend Policy in food and beverage manufacturing companies listed on the Indonesia Stock Exchange 2017-2019?
Do Net Profit and Operating Cash Flow have a simultaneous effect on Dividend Policy in food and beverage manufacturing companies listed on the Indonesia Stock Exchange 2017-2019?
Research purposes
Based on the formulation of the problem above, the objectives of this study are as follows: To determine and analyze the effect of Net Profit partially on Dividend Policy in food and beverage manufacturing companies listed on the Indonesia Stock Exchange. To find out and analyze the operating cash flow has a partial effect on dividend policy in food and beverage manufacturing companies listed on the Indonesia Stock Exchange. To find out and analyze Net Profit and Operating Cash Flow have a simultaneous effect on Dividend Policy in manufacturing companies listed on the Indonesia Stock Exchange.
Benefits of research Theoretical Benefits
The results of this study can be used as a basis for the development of learning media or further application of learning media. In addition, it also becomes an added value for scientific knowledge in the field of Accounting in Indonesia.
Practical Benefits
The practical benefits of this research are:
For researchers, as input and increase knowledge insight when asked for opinions regarding Net Profit and Operating Cash Flows affect Dividend Policy in manufacturing companies listed on the Indonesia Stock Exchange.
For manufacturing companies on the Indonesia Stock Exchange, the results of this study are expected to provide benefits for companies to analyze the company's financial statements and evaluate how far Net Profit and Operating Cash Flow affect the company's dividend policy.
For investors, potential investors, analysts and investment observers, the results of this study can provide a reference for making investment decisions related to the rate of return in the form of company dividends.
For further researchers and the Faculty of Economics, Darma Agung University, this research can be the basis for development and input for future similar research.
METHOD
Research Location and Time
The location of this research was carried out on manufacturing companies listed on the Indonesia Stock Exchange for the 2015-2019 period through the internet media www.idx.co.id. The time of the study was carried out from March to August 2021.
Population and Research Sample Population
Population is everything that includes all the characteristics or properties possessed by the object / subject that is applied to be studied. The population in this study were all food and beverage manufacturing companies listed on the Indonesia Stock Exchange in 2017-2019, totaling 50 companies.
In this case, the researcher chose a company engaged in the manufacturing industry by considering the large number of samples that could be obtained and the reliability of the cash flows presented.
Sample
The sample used is food and beverage manufacturing companies listed on the Indonesia Stock Exchange (IDX) with the following criteria:
The manufacturing company was not delisted from the IDX during the 2017-2019 research period.
The manufacturing company has audited financial statements on the IDX during 2017-2019 The manufacturing company has a net profit in 2017-2019.
The Company Has a statement of operating cash flows in 2017-2019 The manufacturing company has paid dividends in 2017-2019.
Data Types and Sources Data Type
In this study, researchers used secondary data types, namely data obtained indirectly through intermediary media in the form of reports published by the Indonesia Stock Exchange in 2017-2019.
Data source
The source of data used in this study is quantitative data, namely information data using numeric symbols or numbers.
Method of collecting data
In this study, the data collection method used was a literature and documentation study, which is described as follows:
Library Research Methods (Library Research)
This method is done by collecting data from written information that is theoretical about the problems related to this research. This method is carried out to support the completeness of the data using literature or information obtained from literature books, theses, journals, and other sources related to Net Profit and Operating Cash Flow on Dividend Policy.
Field Method (Field Research)
This method is carried out by collecting data and information obtained directly from respondents and observing directly. This collection technique is carried out with documentation techniques where data collection is based on available reports such as company history, company profiles, and company annual reports that have been audited research samples. and published which is listed on the Indonesia Stock Exchange (IDX). This field data collection was obtained through internet media by downloading through the website www.idx.co.id to obtain data on the financial statements needed in this study.
Methods of Data Analysis and Hypothesis Testing
In this study, the data analysis method used is the multiple regression analysis method (Multiple Regression Analysis) using the SPSS (Statistical Package Social Science) version 22 software.
Descriptive Statistical Method
Descriptive statistical method is an analysis in research that functions to describe or provide an overview of the object under study through data and population samples as they are, without analyzing or making generally accepted conclusions from the data. Descriptive statistics are concerned with how data can be described, described or summed up either numerically (eg calculating the mean and standard deviation) or graphically (in the form of tables or graphs) to get a quick overview of the data so that it is easier to read and meaningful.
Classic assumption test
Data testing is done by testing the classical assumption which aims to ensure that the research results are valid.
The data used are theoretically unusual and show a significant and representative relationship. A good regression model must have a data distribution that is normal or close to normal and free from classical assumptions consisting of data normality test, multicollinearity test, heteroscedasticity test, and autocorrelation test. The use of this method meets the classical assumptions or not with the following stages:
Data Normality Test
The data normality test aims to test whether in the regression model, the confounding or residual variables have a normal distribution.
Multicollinearity Test
The multicollinearity test aims to test whether the regression model found a correlation between the independent variables. A good regression model should not have a correlation between the independent variables (Independent).
Heteroscedasticity Test
The heteroscedasticity test has the aim of testing whether in the regression model there is an inequality (variance) from the residual of one observation to another observation. If the variance is constant, it is called homoscedasticity, if it is different it is called heteroscedasticity.
Autocorrelation Test
The autocorrelation test aims to see whether there is a relationship in a linear regression model between the
Jurnal Ilmiah Socio Secretum, Vol. 10, No. 1, June 2020: 59-64
In simple terms, regression analysis consists of testing the effect of the independent variable on the dependent variable so that there should be no correlation between observations and previous observation data.
Multiple Linear Regression Statistical Analysis
According to Sugiyono (2014: 277) "multiple linear regression statistics are basically an extension of simple linear regression, which is to increase the number of independent variables that were previously only one into two or more variables".
Hypothesis test
This hypothesis testing aims to determine the effect of the independent variable on the dependent variable either partially or simultaneously.
Individual Parameter Significant Test (t-test)
The t-statistical test basically shows how far the influence of one explanatory or independent variable individually in explaining the variation to the dependent variable. This test was conducted to see the effect of net income and operating cash flow partially on the Dividend Payout Ratio (DPR) with a significance level of 5%. This test is carried out by comparing the significance of tcount and ttable with the following conditions:
t= 2
1 2 r r
n r
−
−
Information : t = test value t
r = correlation coefficient r2 = coefficient of determination
n – 2 = degrees of freedom distribution student Simultaneous Parameter Significant Test (Test–F)
Statistical F-test was used to test the significance of the effect of all independent variables together (simultaneously) on the dependent variable. The F-test is intended to see the overall ability of the independent variables, namely net income and operating cash flow to dividend policy at a 95% confidence level.
Coefficient of Determination (R2)
The coefficient of determination (R²) is used to measure how far the ability of the dependent variables is. The value of the coefficient of determination (R2) is from zero to one (0 R2≥ A small value of R2 means the ability of the independent variables to explain the dependent variable is very limited. If the coefficient of determination is equal to 0, then the independent variable has no effect on the dependent variable If the magnitude of the coefficient of determination is close to 1, then the independent variable has a strong effect on the dependent variable.
RESULTS AND DISCUSSION Description of Research Object Brief Company History
The Indonesia Stock Exchange (abbreviated BEI, in English Indonesia Stock Exchange / IDX) is a stock market company which is a merger of the Jakarta Stock Exchange (JSX) with the Surabaya Stock Exchange (BES), where the Surabaya Stock Exchange merged into the Jakarta Stock Exchange. The merged company started its operations on December 1, 2007. The Indonesia Stock Exchange is led by President Director Erry Firmansyah, Former President Director of the JSE. Former BES President Director Guntur Pasaribu served as Director of Ficed Income and Derivatives Trading, membership and participation.
Multicollinearity Test
Multicollinearity test aims to test whether the regression model found a correlation between the independent variables (independent). A good regression model should not have a correlation between the independent variables. To detect the presence or absence of multicollinearity in the regression, it can be seen from the Tolerance value and the Variance Inflation Factor (VIF) value. These two measures show each independent variable which is explained by the other independent variables. The cut-off value commonly used to indicate the presence of multicollinearity is a tolerance value <0.10 or equal to VIF>10 which indicates a multicollinearity problem.
Heteroscedasticity Test
Heteroscedasticity test is the occurrence of inequality (variance) from the residual of one observation to another observation. To test the presence or absence of heteroscedasticity, it can be done by looking at the Scatterplot graph between the predicted value of the dependent variable (ZPRED) and the residual (SRESID). The basis of the analysis used is that if there is a certain pattern, such as the points that form a certain regular pattern, it indicates that heteroscedasticity has occurred. If there is no clear pattern such as the dots spread above and below the number 0 on the Y axis, then there is no heteroscedasticity.
Autocorrelation Test
The autocorrelation test aims to see whether there is a relationship in a linear regression model between the confounding error in period t and the error in period t-1. A good regression model is a regression that is free from autocorrelation or does not occur autocorrelation. In this study, the autocorrelation test can be detected and carried out using the Durbin-Watson (D-W) test value with the following criteria:
D-W numbers below -2 mean there is a positive autocorrelation, D-W numbers between -2 to +2, meaning there is no autocorrelation, D-W numbers above +2 mean that there is a negative autocorrelation.
Multiple Linear Regression Statistical Analysis
Statistical Analysis of Multiple Linear Regression is used to determine the relationship between the independent variable and the dependent variable, namely between Net Profit (X1) and Operating Cash Flow (X2) on Dividend Policy (Y).
Hypothesis test
This hypothesis testing aims to determine the effect of the independent variable on the dependent variable either partially or simultaneously. To test it, the following test is used:
Simultaneous Parameter Significant Test (Test–F)
Statistical F-test was used to test the significance of the effect of all independent variables together (simultaneously) on the dependent variable. The F-test is intended to see the overall ability of the independent variables, namely net income and operating cash flow to dividend policy at the 95% confidence level. The test is carried out with the following conditions:
If Fcount < Ftable, then H0 is accepted and Ha is rejected.
If Fcount > Ftable, then Ha is accepted and H0 is rejected.
Information :
H0 = Does not meet eligibility.
Ha = Eligibility.
Coefficient of Determination Test (R2)
The coefficient of determination (R²) is used to measure how far the ability of the dependent variables is. The value of the coefficient of determination (R2) is from zero to one. A small value of R2 means that the ability of the independent variables in explaining the dependent variable is very limited. If the coefficient of determination is equal to 0, then the independent variable has no effect on the dependent variable.
Individual Parameter Significant Test (t-test)
The t-statistical test basically shows how far the influence of one explanatory or independent variable individually in explaining the variation on the dependent variable with a significance level of 5%. This test is carried out by comparing the significance of tcount and ttable with the following conditions:
If tcount < ttable (α = 5%), then H0 is accepted and Ha is rejected.
If tcount > ttable (α = 5%), then Ha is accepted and H0 is rejected.
Result Interpretation
The Effect of Partial Net Income on Dividend Policy
Based on the results of the study which were statistically described using the SPSS program, it can be seen that net income shows the tcount value of the Net Profit variable of -2.520 which is smaller than the ttable value of 1.703 with a significance level of 0.018 greater than a <0.05. Thus the hypothesis is rejected, which means that the Net Profit variable has no effect on the Dividend Policy on food and beverage companies listed on the Indonesia Stock Exchange in 2017-2019.
CONCLUSION
From the results of multiple linear regression, the regression equation Y = -0.334 -0.510X1 -0.165X2. Partial net income (t-test) obtained a value of tcount -2.520 < ttable 1.703 with a value of 0.018 where a value of <0.05 means H0 is accepted. It can be concluded that net income partially has a significant effect on dividend policy (DPR) in manufacturing food and beverage companies listed on the Indonesia Stock Exchange. While for the operating cash flow variable partially (t-test) the value of tcount is -1.239 < ttable 1.703 with a value of 0.226 where the value is >0.05 then H0 is accepted. It can be concluded that operating cash flow partially has no effect on dividend policy (DPR) in manufacturing food and beverage companies listed on the Indonesia Stock Exchange. Simultaneous net income and operating cash flow (F-test) obtained Fcount 3,547 > Ftable 3,35.
With a value of less than 0.05 or (0.043 < 0.05), then Ha is accepted. It can be concluded that the variables of net income and operating cash flow simultaneously have a significant effect on dividend policy (DPR) in manufacturing food and beverage companies listed on the Indonesia Stock Exchange. From the results of the coefficient of determination Adjust R Square in the regression model of food and beverage manufacturing companies, it is obtained by 0.149 or 14.9%. This means that 14.9% Dividend Policy is influenced by the two independent variables, namely net income and operating cash flow. While the remaining 85.1% is influenced
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