Propose Research Models and Hypotheses on the Impact of Current Ratio, Return on Assets, Total Assets Turn Over, Leverage Index, Total Accrual on Total Assets to Dividend Payout Ratio for Manufacturing Enterprises
Journal Title: Journal of Economics, Finance and Management Studies - Year 2023, Vol 6, Issue 08
Abstract
The dividend payout ratio is an important criterion for investors to evaluate the performance of a business. However, determining the level and rate of dividend payment has a great influence on the development strategy and business activities of the enterprise in the future. Therefore, the decision on the dividend payout ratio is always considered and considered carefully by businesses. The objective of this study is to propose a model and develop a research hypothesis so that investors and management can consider the factors affecting the dividend payout ratio. The article uses two research methods, which are the document review method and the meta-analysis method. The authors have proposed three theories including signal theory, agency cost theory, optimal capital structure theory and presented the results of outstanding studies. Analyzing the theoretical basis and reviewing the research, the authors have drawn the financial indicators that affect the dividend payout ratio, namely Current Ratio, Return on Assets, Total Assets Turn Over, Leverage Index. Combining these factors and proposing a new factor, Total Accrual on Total Assets, the authors have built a model of 5 independent variables, respectively Current Ratio, Return on Assets, Total Assets Turn Over, Leverage Index, Total Accrual on Total Assets and dependent variable Dividend Payout Ratio. The article also builds research hypotheses for independent and dependent variables. According to the hypothesis stated, these variables have an impact on the dividend payout ratio of the enterprise and when the independent variables increase, the dividend payout ratio will increase accordingly. The proposed model will be a means of supporting investors and the management board to have an appropriate plan to achieve efficiency for both parties in investment and production and business.
Authors and Affiliations
Le Thi Huong Tram, Nguyen Thi Thanh Nga
Keywords
Related Articles
- EP ID EP727330
- DOI 10.47191/jefms/v6-i8-60
- Views 47
- Downloads 0
The Effect of Profitability, Liquidity, and Leverage on Corporate Values with Corporate Social Responsibility (CSR) as Moderating Variable
The aims of this study were (1) to find out whether profitability has an effect on firm value, (2) to find out whether liquidity has an effect on firm value, (3) to find out whether leverage has an effect on firm value,...
Analysis of Environmental, Social, Governance on Tax Avoidance in Companies Listed on the Indonesia Stock Exchange (IDX)
Every business actor has different business characteristics, so that each company implements a different strategy. Business characteristics describe the industry in which business actors operate, based on the type of bus...
Analysis of Factors Influencing Technology Mastery in Technopreneur SMES in Malang: Innovation Creativity, Resilience, and Social Networking
Digital technology is indispensable for micro, small, and medium-sized enterprises (MSMEs) in today's landscape. In Malang, East Java, a city renowned for its thriving MSMEs, particularly in the creative industry, the Ma...
The Influence of Personality Traits, Competencies and Organizational Citizenship Behavior on Teacher Performance Which is Moderate by Organizational Culture (Study At Darullughoh Wadda'wah Islamic Boarding School)
This research is motivated by teacher performance. The purpose of this research is to determine the influence of the relationship between personality traits, competence, organizational citizenship behaviour can have an i...
Employees' Perception of the Contributory Pension Scheme (CPS) and Its Implementation Effect in Malawi’s Shire Highlands Education Division.
There have been dynamics in the pension systems globally which have witnessed various countries embracing the pension reforms within their Pension Scheme arrangements in respective jurisdictions. This evolution compelled...