IDEAS home Printed from https://ideas.repec.org/p/osf/osfxxx/ghtz5.html
   My bibliography  Save this paper

Debt Policy, Liquidity Policy, and Profitability: A Proof from the Agricultural Companies in Indonesia

Author

Listed:
  • Njotoprajitno, Rosemarie Sutjiati
  • Peter, Peter
  • Hermawan, Vicky
  • Hadianto, Bram

Abstract

Profits describe managers' performance in front of the company stakeholders, especially shareholders, suppliers, and creditors. Therefore, they must organize the financial resources well by taking exceptional policies. This research aims to know manager behavior to utilize debt and liquidity policies to create profits by examining their effect on profitability in the agricultural companies listed on the Indonesian capital market between 2014 and 2020 as the population and samples. Because of their homogeneous feature and the variables-related data, this study applies the simple random sampling method and the t-test for the coefficients in the regression model to prove each relationship. By Denoting these statistical testing results and their discussion, this study infers a negative relationship between debt policy and profitability. Conversely, the liquidity policy is positively associated with profitability. Therefore, we suggest managers use less debt and excess current assets, significantly cash, to enhance profits.

Suggested Citation

  • Njotoprajitno, Rosemarie Sutjiati & Peter, Peter & Hermawan, Vicky & Hadianto, Bram, 2022. "Debt Policy, Liquidity Policy, and Profitability: A Proof from the Agricultural Companies in Indonesia," OSF Preprints ghtz5, Center for Open Science.
    • Handle: RePEc:osf:osfxxx:ghtz5
    DOI: 10.31219/osf.io/ghtz5
    as

    Download full text from publisher

    File URL: https://osf.io/download/636759e8a3a1dd158a9c1c4a/
    Download Restriction: no
    File URL: https://libkey.io/10.31219/osf.io/ghtz5?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Maja Pervan & Ivica Pervan & Marijana Ćurak, 2019. "Determinants of firm profitability in the Croatian manufacturing industry: evidence from dynamic panel analysis," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 32(1), pages 968-981, January.
    2. Panagiotis G. Liargovas & Konstantinos S. Skandalis, 2012. "The impact of leverage and other key variables on business performance: evidence from Greece," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 4(4), pages 472-484.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mercè Sala‐Ríos, 2024. "What are the determinants affecting cooperatives’ profitability? Evidence from Spain," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 95(1), pages 85-111, March.
    2. Christian Espinosa-Méndez, 2022. "Civil unrest and firm performance: evidence from Chile," Economics and Business Letters, Oviedo University Press, vol. 11(3), pages 118-124.
    3. Maquieira, Carlos P. & Espinosa-Méndez, Christian & Gahona-Flores, Orlando, 2023. "How does economic policy uncertainty (EPU) impact copper-firms stock returns? International evidence," Resources Policy, Elsevier, vol. 81(C).
    4. Mohamed Aymen Ben Moussa & Amira El Feidi, 2023. "The Impact of Leverage on Financial Performance of Tunisian Quoted Firms," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(4), pages 101-116.
    5. Stanić Milan & Cita Melita & Šulentić Marina Stanić, 2023. "The Influence of Working Capital Management on the Profitability of Manufacturing Enterprises - The Case of Croatia," South East European Journal of Economics and Business, Sciendo, vol. 18(2), pages 126-139, December.
    6. Yehui Tong & Ramon Saladrigues, 2022. "An analysis of factors affecting the profits of new firms in Spain: Evidence from the food industry," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 68(1), pages 28-38.
    7. M N, Nikhil & Chakraborty, Suman & B M, Lithin & Lobo, Lumen Shawn, 2023. "Does the adoption of Ind AS affect the performance of firms in India?," MPRA Paper 117247, University Library of Munich, Germany, revised 18 Apr 2023.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:osf:osfxxx:ghtz5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: OSF (email available below). General contact details of provider: https://osf.io/preprints/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.