The impact of financial liquidity and leverage on financial performance: Evidence from property and real estate enterprises in Indonesia

Daryanto, W.; Samidi, S.; Siregar, D.

Growing Science » Management Science Letters » The impact of financial liquidity and leverage on financial performance: Evidence from property and real estate enterprises in Indonesia

Journals

MSL Volumes

Volume 1 (70)
- Issue 1 (10)
- Issue 2 (15)
- Issue 3 (20)
- Issue 4 (25)

Volume 2 (365)
- Issue 1 (51)
- Issue 2 (32)
- Issue 3 (40)
- Issue 4 (44)
- Issue 5 (42)
- Issue 6 (52)
- Issue 7 (53)
- Issue 8 (51)

Volume 3 (426)
- Issue 1 (40)
- Issue 2 (47)
- Issue 3 (40)
- Issue 4 (40)
- Issue 5 (27)
- Issue 6 (50)
- Issue 7 (51)
- Issue 8 (30)
- Issue 9 (24)
- Issue 10 (25)
- Issue 11 (25)
- Issue 12 (27)

Volume 4 (387)
- Issue 1 (34)
- Issue 2 (30)
- Issue 3 (34)
- Issue 4 (42)
- Issue 5 (33)
- Issue 6 (43)
- Issue 7 (42)
- Issue 8 (40)
- Issue 9 (39)
- Issue 10 (20)
- Issue 11 (18)
- Issue 12 (12)

Volume 5 (129)
- Issue 1 (15)
- Issue 2 (10)
- Issue 3 (10)
- Issue 4 (12)
- Issue 5 (14)
- Issue 6 (14)
- Issue 7 (8)
- Issue 8 (8)
- Issue 9 (11)
- Issue 10 (8)
- Issue 11 (9)
- Issue 12 (10)

Volume 6 (74)
- Issue 1 (9)
- Issue 2 (6)
- Issue 3 (6)
- Issue 4 (7)
- Issue 5 (6)
- Issue 6 (6)
- Issue 7 (8)
- Issue 8 (6)
- Issue 9 (5)
- Issue 10 (5)
- Issue 11 (5)
- Issue 12 (5)

Volume 7 (54)
- Issue 1 (5)
- Issue 2 (5)
- Issue 3 (5)
- Issue 4 (5)
- Issue 5 (5)
- Issue 6 (5)
- Issue 7 (4)
- Issue 8 (4)
- Issue 9 (4)
- Issue 10 (4)
- Issue 11 (4)
- Issue 12 (4)

Volume 8 (119)
- Issue 1 (5)
- Issue 2 (5)
- Issue 3 (5)
- Issue 4 (5)
- Issue 5 (22)
- Issue 6 (20)
- Issue 7 (6)
- Issue 8 (6)
- Issue 9 (8)
- Issue 10 (10)
- Issue 11 (11)
- Issue 12 (16)

Volume 11 (251)
- Issue 1 (36)
- Issue 2 (39)
- Issue 3 (40)
- Issue 4 (40)
- Issue 5 (29)
- Issue 6 (27)
- Issue 7 (20)
- Issue 8 (12)
- Issue 9 (8)

Volume 12 (33)
- Issue 1 (6)
- Issue 2 (6)
- Issue 3 (8)
- Issue 4 (13)

Volume 13 (27)
- Issue 1 (7)
- Issue 2 (8)
- Issue 3 (5)
- Issue 4 (7)

Volume 14 (22)
- Issue 1 (6)
- Issue 2 (6)
- Issue 3 (5)
- Issue 4 (5)

Volume 15 (15)
- Issue 1 (5)
- Issue 2 (5)
- Issue 3 (5)

Countries

Management Science Letters

ISSN 1923-9343 (Online) - ISSN 1923-9335 (Print) Quarterly Publication Volume 8 Issue 12 pp. 1345-1352 , 2018

The impact of financial liquidity and leverage on financial performance: Evidence from property and real estate enterprises in Indonesia Pages 1345-1352 Download PDF

Authors: Wiwiek Mardawiyah Daryanto, Sudarmawan Samidi, Dera Julianti Siregar

DOI: 10.5267/j.msl.2018.9.005

Keywords: Liquidity, Leverage, Financial performance, Property, Real estate

Abstract: The demand for property increases every year in line with the population growth in Indonesia. Moreover, the society believes that investing in the property will have future benefits since there is an expectation of an increase in strong middle-class consumer spending made to the residential business segment and also urban society demands for apartments and condominiums. Loans and mortgages are often made by both owners and developers in order to own the property. Therefore, this study investigates the impacts of financial liquidity and leverage on the financial performance of the Indonesian property and real estate enterprises. The study considers three (3) selected companies listed on Indonesia Stock Exchange LQ 45 (IDX LQ 45) over period five (5) years (2012- 2016). The secondary data are obtained from the financial statement (comprehensive income statement and statement of financial position) of selected property and real estate companies listed on IDX. This data is analyzed by using the regression analysis; the t-statistics and F significance ANOVA were used to test the hypothesis. The result of the analysis show that Current Ratio (CR) and Debt-Asset Ratio (DAR) had a negative relationship with Return on Assets (ROA) while Times Interest Earned (TIE) had a positive relationship with ROA in Indonesia property and real estate industry.

How to cite this paper

 Daryanto, W., Samidi, S & Siregar, D. (2018). The impact of financial liquidity and leverage on financial performance: Evidence from property and real estate enterprises in Indonesia.Management Science Letters , 8(12), 1345-1352.

Refrences

Ahmad, R. (2016). A study of relationship between liquidity and profitability of standard chartered bank Pakistan: Analysis of financial statement approach. Global Journal of Management and Busi-ness Research, 16(1).
Alamer, A. R. A., Salamon, H. B., Qureshi, M. I., & Rasli, A. M. (2015a). A new business process and outcome oriented corporate social responsibility index for Islamic banking. International Journal of Economics and Financial Issues, 5(1S), 207-214.
Alamer, A. R. A., Salamon, H. B., Qureshi, M. I., & Rasli, A. M. (2015b). CSR’s measuring corporate social responsibility practice in Islamic banking: A review. International Journal of Economics and Financial Issues, 5(1S), 198-206.
Alamer, A. R. A., Salamon, H. B., Qureshi, M. I., & Rasli, A. M. (2015c). How do we measure corpo-rate social responsibility of Islamic banks through their business processes and oriented out-comes?. International Journal of Economics and Financial Issues, 5(1S), 190-197.
Almajali, A. Y., Alamro, S. A., & Al-Soub, Y. Z. (2012). Factors affecting the financial performance of Jordanian insurance companies listed at Amman Stock Exchange. Journal of Management re-search, 4(2), 266-289.
Bank Indonesia (2017). Daya Beli Lemah, Indeks Sektor Properti Melempem. Retrieved from: https://www.cnnindonesia.com/ekonomi/20170717112025-92-228306/daya-beli-lemah-indeks-sektor-properti-melempem/
Bolton, P. (2004). Liquidity and financial instability: An introduction. Journal of the European Eco-nomic Association, 2(6), 925-928.
Bragg, S.M. (2012). Business Ratios and Formulas (Third Edition). Wiley & Sons Inc: Hoboken, New jersey.
Ghozali, Imam. 2005. Aplikasi Multivariate Dengan Program IBM SPSS 19. Badan Penerbit Universitas Diponegoro: Semarang.
Goel, U., Chadha, S., Sharma, A.K. (2015). Operating liquidity and financial leverage: Evidences from Indian machinery industry. Procedia – Social and Behavioral Sciences, 189, 344-350.
Hansen, R., & Mowen, M. (2005). Management Accounting. 7th ed. Singapore: South-Western
Havnes, P. A., & Senneseth, K. (2001). A panel study of firm growth among SMEs in networks. Small Business Economics, 16(4), 293-302.
Javed, Z. H., Rao, H. H., Akram, B., & Nazir, M. F. (2015). Effect of financial leverage on perfor-mance of the firms: Empirical evidence from Pakistan. SPOUDAI-Journal of Economics and Busi-ness, 65(1-2), 87-95.
Enekwe, C. I., Agu, C. I., & Eziedo, K. N. (2014). The effect of financial leverage on financial perfor-mance: evidence of quoted pharmaceutical companies in Nigeria. IOSR Journal of Economics and Finance, 5(3), 17-25.
Investment Property Forum. (2004). Liquidity in Commercial Property Markets. Robert, E.L. (2014). Liquidity: Meaning, Measurement, Management. Federal Reserve Bank of St. Louis Review: Third Quarter 2014, 96(3), 99-212.
Investment Property Forum. (2015). Estimating Liquidity in Real Estate Markets – Literature Review.
Iswatia, S., & Anshoria, M. (2007). The Influence of Intellectual Capital to Financial Performance at Insurance Companies in Jakarta Stock Exchange (JSE), Proceedings of the 13th Asia Pacific Man-agement Conference, Melbourne, Australia.
Owino, E. O. (2011). The relationship between liquidity and leverage of companies quoted at the NSE. Unpublished MBA Project.
Priyatno, Dwi. (2012). Cara Kilat Belajar Analisis Data Dengan SPSS 20. Andi: Yogyakarta.
Rajkumar, P. (2014). Impact of Financial Leverage on Financial Performance: Special Reference to John Keels Holdings plc in Sri Lanka. Scientific Research Journal, Volume II.
Sartono, Agus. (2010). Manajemen Keuangan Teori dan Aplikasi (edisi 4). BPFE-Yogyakarta: Yogya-karta.
Sugiyono. (2010). Statistika Untuk Penelitian. Alfabeta: Bandung.
Trinh, T. H., & Mai, P. T. T. (2016). The determinants of corporate liquidity in real estate industry: Evi-dence from Vietnam. International Journal of Economics and Finance, 8(7), 21.
Wibowo, Edy. (2012). Aplikasi Praktis SPSS Dalam Penelitian. Gava Media: Yogyakarta.