Cash Holding, Financial Leverage, Profitability, Firm Size, Income Smoothing: Moderating Managerial Ownership

Abstract

This study aims to empirically demonstrate the effect of cash holding, financial leverage, profitability, and company size on income smoothing in the Indonesia Stock Exchange's primary consumer goods sector from 2017 to 2021. The study population amounted to 98 companies and a sample of 16 companies. This study used logistic regression analysis and moderation regression analysis for hypothesis testing. The findings revealed that cash holding and leverage negatively affect income smoothing, profitability positively affect income smoothing, whereas company size has no effect. Furthermore, the study's findings empirically demonstrate that leverage strengthens managerial ownership's influence on income smoothing.
 Keywords: Income Smoothing; Cash Holding; Financial Leverage; Profitability; Firm Size; Managerial Ownership

The Influence of Corporate Liquidity, Networking Capital on Cash Holdings in Iraqi Islamic Banks

“…Cash serves to mitigate the gap between a company's retained profits and its investment requirements. Cash-holding firms adopt revenue smoothing measures to sustain a continuous growth in cash holding (Musyafa & Kholilah, 2023). The influence may also extend to long-term indicators like the Company's financial capacity to satisfy its long-term commitments and its possibilities of getting long-term loans (Khaghaany & Jabbar, 2022).…”