Analysis of Factors Affecting Cash Dividends in Consumer Goods Manufacturing Companies that Go Public in the Jakarta Stock Exchange

Oct 13, 2025 by windailys.com 8 views

Analysis of Factors Affecting Cash Dividends in Consumer Goods Manufacturing Companies that Go Public in the Jakarta Stock Exchange

Introduction

The decision to distribute cash dividends is a crucial aspect of a company's financial management strategy. In the context of consumer goods manufacturing companies listed on the Jakarta Stock Exchange (JSE), understanding the factors that influence this decision is essential for investors and financial managers. This study aims to analyze the factors that affect the decision of consumer goods manufacturing companies to distribute cash dividends, with a focus on the role of Return on Investment (ROI), Cash Ratio, Current Ratio, Debt to Total Assets (DTA), Earning Per Share (EPS), Debt to Equity Ratio, and Dividend Payout Ratio.

Literature Review

The distribution of cash dividends is a critical aspect of a company's financial management strategy, as it reflects the company's ability to generate profits and distribute them to shareholders. Several studies have examined the factors that influence the decision to distribute cash dividends, including profitability, liquidity, capital structure, and dividend payout ratio. However, the specific factors that influence the decision of consumer goods manufacturing companies listed on the JSE have not been extensively studied.

Methodology

This study uses financial statement data from 31 consumer goods manufacturing companies listed on the JSE during the 2004-2007 period. The data was collected through the documentation of financial statements from the JSE and analyzed using multiple linear regression tests with the help of SPSS software. The study examines the effect of ROI, Cash Ratio, Current Ratio, DTA, EPS, Debt to Equity Ratio, and Dividend Payout Ratio on cash dividends, both simultaneously and partially.

Results

The results of this study show that ROI, Cash Ratio, Current Ratio, DTA, EPS, Debt to Equity Ratio, and Dividend Payout Ratio simultaneously have a significant effect on cash dividends. The variations described by the research model were 45.3%, whereas the remaining 54.7% is influenced by other variables that are not explained in this model. Partially, Cash Ratio, Current Ratio, and Debt to Equity Ratio have a significant influence on cash dividends. However, ROI, DTA, EPS, and Dividend Payout Ratio have no significant influence on cash dividends.

Implications

The results of this study provide some important implications for investors and financial managers:

*** Investors can use significant variables (Cash Ratio, Current Ratio, and Debt to Equity Ratio) as a tool in fundamental analysis to predict the potential of cash dividends that will be shared by the company. ** *** Financial managers can consider these variables in decision making related to the distribution of cash dividends. ** *** This study shows that the company's internal factors, such as profitability (ROI), Liquidity (Cash Ratio and Current Ratio), and Capital Structure (Debt to Equity Ratio) have a significant influence on company decisions in distributing cash dividends. **

Limitations

This study has several limitations. First, research only uses company financial statement data, so that external factors that can influence dividend decisions are not considered. Second, the number of samples used is limited to 31 companies, so the results of this study may not be widely generalized.

Conclusion

Despite these limitations, this study made a valuable contribution in understanding the factors that influence the decision of the consumer goods manufacturing company in distributing cash dividends. The results of this study can be used as a basis for further research that examines external factors or using larger samples.

Future Research Directions

Future research can build on the findings of this study by examining the role of external factors, such as market conditions, industry trends, and regulatory requirements, in influencing the decision to distribute cash dividends. Additionally, research can use larger samples to increase the generalizability of the findings.

References

[List of references cited in the study]

Appendices

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Tables and Figures

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Data Description

The data used in this study consists of financial statement data from 31 consumer goods manufacturing companies listed on the JSE during the 2004-2007 period. The data includes variables such as ROI, Cash Ratio, Current Ratio, DTA, EPS, Debt to Equity Ratio, and Dividend Payout Ratio.

Data Analysis

The data was analyzed using multiple linear regression tests with the help of SPSS software. The study examines the effect of the variables on cash dividends, both simultaneously and partially.

Conclusion

In conclusion, this study provides valuable insights into the factors that influence the decision of consumer goods manufacturing companies to distribute cash dividends. The results of this study can be used as a basis for further research that examines external factors or using larger samples.
Q&A: Analysis of Factors Affecting Cash Dividends in Consumer Goods Manufacturing Companies that Go Public in the Jakarta Stock Exchange

Frequently Asked Questions

Q: What is the main objective of this study?

A: The main objective of this study is to analyze the factors that influence the decision of consumer goods manufacturing companies listed on the Jakarta Stock Exchange (JSE) to distribute cash dividends.

Q: What are the variables examined in this study?

A: The variables examined in this study include Return on Investment (ROI), Cash Ratio, Current Ratio, Debt to Total Assets (DTA), Earning Per Share (EPS), Debt to Equity Ratio, and Dividend Payout Ratio.

Q: What is the significance of this study?

A: This study provides valuable insights into the factors that influence the decision of consumer goods manufacturing companies to distribute cash dividends. The results of this study can be used as a basis for further research that examines external factors or using larger samples.

Q: What are the implications of this study for investors and financial managers?

A: The results of this study provide some important implications for investors and financial managers. Investors can use significant variables (Cash Ratio, Current Ratio, and Debt to Equity Ratio) as a tool in fundamental analysis to predict the potential of cash dividends that will be shared by the company. Financial managers can consider these variables in decision making related to the distribution of cash dividends.

Q: What are the limitations of this study?

A: This study has several limitations. First, research only uses company financial statement data, so that external factors that can influence dividend decisions are not considered. Second, the number of samples used is limited to 31 companies, so the results of this study may not be widely generalized.

Q: What are the future research directions based on the findings of this study?

A: Future research can build on the findings of this study by examining the role of external factors, such as market conditions, industry trends, and regulatory requirements, in influencing the decision to distribute cash dividends. Additionally, research can use larger samples to increase the generalizability of the findings.

Q: What are the practical implications of this study for financial managers?

A: The results of this study provide some important implications for financial managers. Financial managers can consider the variables examined in this study when making decisions related to the distribution of cash dividends. This can help financial managers to make more informed decisions and to better manage the company's cash dividend policy.

Q: What are the implications of this study for investors?

A: The results of this study provide some important implications for investors. Investors can use significant variables (Cash Ratio, Current Ratio, and Debt to Equity Ratio) as a tool in fundamental analysis to predict the potential of cash dividends that will be shared by the company. This can help investors to make more informed investment decisions and to better manage their investment portfolios.

Additional Questions and Answers

Q: What is the significance of the Jakarta Stock Exchange (JSE) in this study?

A: The Jakarta Stock Exchange (JSE) is the primary stock exchange in Indonesia and is a key player in the country's financial market. The JSE is used as the sample population in this study because it is a major stock exchange in the region and provides a representative sample of consumer goods manufacturing companies.

Q: What is the role of Return on Investment (ROI) in this study?

A: Return on Investment (ROI) is a key variable examined in this study. ROI is a measure of a company's profitability and is calculated as net income divided by total assets. The study finds that ROI has a significant influence on the decision to distribute cash dividends.

Q: What is the role of Cash Ratio in this study?

A: Cash Ratio is a key variable examined in this study. Cash Ratio is a measure of a company's liquidity and is calculated as cash and cash equivalents divided by current liabilities. The study finds that Cash Ratio has a significant influence on the decision to distribute cash dividends.

Q: What is the role of Debt to Equity Ratio in this study?

A: Debt to Equity Ratio is a key variable examined in this study. Debt to Equity Ratio is a measure of a company's capital structure and is calculated as total debt divided by total equity. The study finds that Debt to Equity Ratio has a significant influence on the decision to distribute cash dividends.

Conclusion

In conclusion, this Q&A article provides additional insights into the factors that influence the decision of consumer goods manufacturing companies to distribute cash dividends. The results of this study can be used as a basis for further research that examines external factors or using larger samples.