Debt Policy, Liquidity Policy, and Profitability: A Proof from the Agricultural Companies in Indonesia

Rosemarie Sutjiati Njotoprajitno, Peter Peter, Vicky Hermawan and Bram Hadianto

No ghtz5, OSF Preprints from Center for Open Science

Abstract: Profits describe managers' performance in front of the company stakeholders, especially shareholders, suppliers, and creditors. Therefore, they must organize the financial resources well by taking exceptional policies. This research aims to know manager behavior to utilize debt and liquidity policies to create profits by examining their effect on profitability in the agricultural companies listed on the Indonesian capital market between 2014 and 2020 as the population and samples. Because of their homogeneous feature and the variables-related data, this study applies the simple random sampling method and the t-test for the coefficients in the regression model to prove each relationship. By Denoting these statistical testing results and their discussion, this study infers a negative relationship between debt policy and profitability. Conversely, the liquidity policy is positively associated with profitability. Therefore, we suggest managers use less debt and excess current assets, significantly cash, to enhance profits.

Date: 2022-11-06
New Economics Papers: this item is included in nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://osf.io/download/636759e8a3a1dd158a9c1c4a/

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:osf:osfxxx:ghtz5

DOI: 10.31219/osf.io/ghtz5

Access Statistics for this paper

More papers in OSF Preprints from Center for Open Science
Bibliographic data for series maintained by OSF ().