The Impact of Losses and Cash Flows on Dividend
Abstract
Ristiono (2005), The Impact of Losses and Cash Flows on
Dividend.Yogyakarta. Accounting Department. Economic Faculty. Islamic
University of Indonesia.
The objective of the research is to examine the impact of cash flows,
earnings, and losses insetting dividend policy. More specifically; i)earnings, cash
flows, and annual losses are posited to be associated with dividend changes in
firms with established earnings and dividend record and ii) dividend reductions,
current operating earnings and cash flow have information in predicting future
earnings.
As much as 60 manufacturing companies listed on Jakarta Stock Exchange
within 1997-2002 of fiscal year were taken as a sample of the research. Data from
audited financial statement were taken from Jakarta Stock Exchange. The
statistical method used to test the hypothesis is a linear regression model. Twenty
two models are considered in this research. The 1st until 15th models are used to
examine the association of earnings, cash flows, and losses with dividend
changes. The 16th until 22nd are used to examine that dividend reduction, current
operating earnings, and cash flows have information inpredicting future earnings.
The result of the research reveals that there is an association between
earnings, cash flows, and losses with dividend changes. Result also indicates that
dividend reductions, current operating earnings and cash flows have an
information to predict future earnings.
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