Seybold Report ISSN: 1533-9211
Ainun Jariah
Doctoral Student, Faculty of Economic & Bussiness University of Jember, Indonesia
Isti Fadah
Promotor and lecturer at Jember University, Indonesia
Hadi Paramu
Promotor and lecturer at Jember University, Indonesia
Purnami Titisari
Promotor and lecturer at Jember University, Indonesia
Vol 17, No 06 ( 2022 ) | DOI: 10.5281/zenodo.6723956 | Licensing: CC 4.0 | Pg no: 136-149 | Published on: 24-06-2022
Abstract
Investors and creditors use information about the company's financial performance to see the ability to maintain funds in the company. Earnings information is the main concern in assessing performance or management accountability. Earnings information helps owners or other parties estimate the company's future earning power. Companies must pay attention to factors that affect their financial performance, including funding decisions, investment decisions, dividend policies, good corporate governance, economic value-added, and real earnings smoothing. This study analyzes the effect of funding decisions, investment decisions, dividend policies, good corporate governance, and economic value added on financial performance through real earning smoothing in Indonesia. The sample used is 37 companies listed on the Indonesia Stock Exchange from 2012 to 2017, especially those that distribute dividends. The data analysis method used was the AMOS Structural Equation Model (SEM) and the Sobel test. The results showed that of the six independent variables, only dividend policy, good corporate governance, and economic value added significantly affected the company's financial performance. Funding decisions are the only independent variable that affects real earning smoothing, and real earning smoothing is unable to mediate between financial decisions, good corporate governance, and economic value added on financial performance.
Keywords:
Financial decisions, Good Corporate Governance, Economic Value Added, Real Earning Smoothing, Financial Performance.