Financial Statement Analysis Of Leverage And How It Informs About Profitability And Price-To-Book Ratio
Abstract
Apriansyah, Aries. (2005). Financial Statement Analysis of Leverage and How It
Informs About Profitability and Price-to-book Ratio. Yogyakarta. Faculty of
Economics. Universitas Islam Indonesia.
This empirical study is based on financial statement data of the manufacturing
companies listed on Jakarta Stock Exchange in the period of 1999-2003. This study
uses leverage variables that arise from operating and financing activities as
independent variable proxy and shareholders profitability represented by Return on
Common Equity (ROCE), Return on Net Assets (RNOA) and Return on Operating
Assets (ROOA) as the dependent variables.
This study uses Pearson correlation analysis and multiple linear regression
models. An empirical analysis shows that financing leverage correlate negatively on
shareholders profitability, while operating liability leverage correlate positively on
operating profitability. Another analysis results that total leverage statistically
significant affect on shareholders profitability. On the other hand, the analysis also
provides evidence that operating liability leverage does not negatively affect on
shareholders profitability. Accordingly, financial statement analysis that distinguishes
the two types of liabilities aids in evaluating price-to-book ratio appropriately.
Collections
- Akuntansi [4426]