Does Financial Performance Matter? Evidence on the Impact of Liquidity and Firm Size on Stock Return in Indonesia

Chabachib, Mochammad; Setyaningrum, Ike; Hersugondo, Hersugondo; Shaferi, Intan; Pamungkas, Imang Dapit

doi:10.5430/ijfr.v11n4p546

Cited by 6 publications

(6 citation statements)

References 24 publications

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“…Over-reliance on debt financing may increase the business' riskiness that leads to financial problems which eventually deteriorate the companies' activities and performance. However, it found that the relationship between leverage and company performance to be positive in other studies such as Chabachib et al, (2020). It argued that higher debt financing would restrain managerial discretion, encourage management to strategise their activities to obtain higher profits, gain creditors confidence, and boost the growth of business activities (Chabachib et al, 2020;Hedija & Němec, 2021).…”

Section: Leverage and Company Performancementioning

confidence: 94%

“…However, it found that the relationship between leverage and company performance to be positive in other studies such as Chabachib et al, (2020). It argued that higher debt financing would restrain managerial discretion, encourage management to strategise their activities to obtain higher profits, gain creditors confidence, and boost the growth of business activities (Chabachib et al, 2020;Hedija & Němec, 2021). Therefore, the relationship between leverage and company performance is indecisive and worth to be investigated.…”

Section: Leverage and Company Performancementioning

confidence: 96%

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Company Performance during Covid-19: Impact of Leverage, Liquidity and Cash Flows

Shaharuddin¹,

Mahmud

Azhari

et al. 2021

E-BPJ

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Due to the movement control order, company performance is predicted to be highly affected by Covid-19 pandemic. Thus, this study seeks to examine the impact of leverage, liquidity and cash flows from operations towards company performance during the Covid-19 pandemic. Using secondary data from public listed companies on Bursa Malaysia with two financial quarters in the financial year 2020, it is found that there is a significant impact of liquidity and cash flows from operations on company performance. This study may contribute as additional literature to future studies and provide sights to regulators in dealing with the pandemic outbreak. Keywords: Covid-19; leverage; liquidity; cash flows eISSN: 2398-4287© 2021. The Authors. Published for AMER ABRA cE-Bs by e-International Publishing House, Ltd., UK. This is an open access article under the CC BYNC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/). Peer–review under responsibility of AMER (Association of Malaysian Environment-Behaviour Researchers), ABRA (Association of Behavioural Researchers on Asians/Africans/Arabians) and cE-Bs (Centre for Environment-Behaviour Studies), Faculty of Architecture, Planning & Surveying, Universiti Teknologi MARA, Malaysia. DOI:

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Section: Leverage and Company Performancementioning

confidence: 94%

Section: Leverage and Company Performancementioning

confidence: 96%

Company Performance during Covid-19: Impact of Leverage, Liquidity and Cash Flows

Shaharuddin¹,

Mahmud

Azhari

et al. 2021

E-BPJ

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“…Matthew et al [5] suggested that long-term debt and return on assets (ROA) have favorable correlation. Chabachib et al [6] found a positive relationship between leverage and company performance. Since higher debt financing can further incentivize management to capture profits and contribute to positive corporate performance.…”

Section: Leverage and Company Performancementioning

confidence: 98%

Leverage, liquidity, cash flows and company performance of Chinese listed logistics companies during COVID-19 based on multiple linear regression model and data mining

Qiu¹

2023

AEMR

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Due to the control policies, company performance is highly affected by the COVID-19 pandemic. This paper aims to examine the impact of leverage, liquidity and cash flows from operations towards company performance of Chinese logistics companies during the COVID-19 crisis. The data are collected from listed logistics companies during 2020-2021, and multiple regression analysis is carried out. Company performance is measured through return on assets and return on equity. The results show that liquidity and cash flows from operations have a positive impact on company performance, while leverage negatively affects company performance. This paper will contribute to the current literature and will aid corporate managers to deal with the COVID-19 crisis.

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“…Padahal, perusahaan juga harus berorientasi pada value. Demi mengatasi masalah ini, solusinya adalah dengan penggunaan metode Economic Value Added [10,18,19,31,32].…”

Section: Hubungan Ukuran Perusahaan Sebagai Variabel Moderasi Dalam H...unclassified

Analisis Kinerja Keuangan Menggunakan Metode EVA dan MVA Terhadap Return Saham Yang Dimoderasi Oleh Ukuran Perusahaan

Permatasari,

Gunarto

2024

JISMAB

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Research aim: This study was structured to analyze the effect of financial performance using the EVA and MVA methods on stock returns by including company size as a moderating variable. Design/Methode/Approach: The study uses a quantitative approach. The population of this study is food and beverage sub-sector companies listed on the Indonesia Stock Exchange (IDX) for the 2021-2022 period, using a purposive sampling technique to obtain a total sample of 27 companies and analyzed with the SEM-PLS approach to test the hypothesis. Research Finding: The results of the study found that company performance significantly affects stock returns using the EVA and MVA methods. However, firm size does not affect stock returns, so the variable firm size cannot moderate financial performance using the EVA and MVA methods on stock returns. This proves that the company has not been able to create added value, and company size cannot determine the continuity of a company's business. Theoretical contribution/Originality: Research is expected to expand knowledge in the field of finance and can be used as a reference in conducting further research. Practitioner/Policy implication: The study's results are expected to be a consideration and input in improving performance, especially in making policies oriented to increasing corporate value in the future. Research limitation: The research is only limited to Economic Value Added (EVA) and Market Value Added (MVA) variables; there are still many interesting value-added variables that can motivate future researchers to use other variables such as the Cash Value Added method, Refined Economic Value Added, Financial Value Added and so on.

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Does Financial Performance Matter? Evidence on the Impact of Liquidity and Firm Size on Stock Return in Indonesia

Cited by 6 publications

References 24 publications

Company Performance during Covid-19: Impact of Leverage, Liquidity and Cash Flows

Company Performance during Covid-19: Impact of Leverage, Liquidity and Cash Flows

Leverage, liquidity, cash flows and company performance of Chinese listed logistics companies during COVID-19 based on multiple linear regression model and data mining

Analisis Kinerja Keuangan Menggunakan Metode EVA dan MVA Terhadap Return Saham Yang Dimoderasi Oleh Ukuran Perusahaan

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