Increase Prosperity Shareholder with Leverage Analysis and Asset Effectiveness Companies in the IDX 30 Index

Ninik Lukiana (), Ainun Jariah () and Sukma Indriani ()
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Ninik Lukiana: Institutt Teknologi Dan Bisnis Widya Gama, Program Studi Manajemen)
Ainun Jariah: Institutt Teknologi Dan Bisnis Widya Gama, Program Studi Manajemen)
Sukma Indriani: Institutt Teknologi Dan Bisnis Widya Gama, Program Studi Manajemen)

A chapter in Proceedings of the Conference on SDGs Transformation Through the Creative Economy: Encouraging Innovation and Sustainability (TCEEIS 2023), 2023, pp 193-198 from Springer

Abstract: Abstract The goal of a company is to maximize the prosperity of company owners/shareholders or maximize company value and the sustainability of the company’s business. Management as an agent must be more effective and efficient in utilizing and managing resources, especially financial resources owned by the company. Managers must be precise in determining funding strategies to fund investment activities and company operational activities by paying attention to the optimal level of leverage and the level of asset effectiveness. This research aims to prove leverage analysis (financial leverage and operating leverage) and the effectiveness of company assets in influencing the prosperity of shareholders of 21 companies in the IDX 30 Index for 2016–2020. This research method is quantitative research, using deductive data and time series numerical data, using hypotheses with inferential statistical methods.The type of research method is correlational to determine the relationship between Operating Leverage, Financial Leverage and Asset Effectiveness with shareholder prosperity. Empirical studies prove that Operating Leverage and Financial Leverage do not affect shareholder prosperity, and Asset Effectiveness affects shareholder prosperity. However, it is proven that operating leverage, financial leverage and asset effectiveness can explain the creation of value for company shareholders/shareholder prosperity.

Keywords: Financial Leverage; Operating Leverage; Asset -Effectiveness; Shareholder (search for similar items in EconPapers)
Date: 2023
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DOI: 10.2991/978-94-6463-346-7_36

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