Citation:

Adat Muli Peranginangin, Martina Napatrilova Nainggolan. "The Effect of Liquidity, Leverage, Profitability, Earnings Growth, and Firm Size on Dividend Policy in Consumer Goods Companies Listed on the Indonesia Stock Exchange" International Research Journal of Economics and Management Studies, Vol. 5, No. 1, pp. 114-120, 2026. Crossref. http://doi.org/10.56472/25835238/IRJEMS-V5I1P113

Abstract:

This study aims to examine the effect of liquidity, leverage, profitability, earnings growth, and firm size on dividend policy in consumer goods companies listed on the Indonesia Stock Exchange (IDX) during the 2022–2023 period. Using purposive sampling, a total of 30 companies were selected, resulting in 60 firm-year observations. The dependent variable, dividend policy, was measured by the Dividend Payout Ratio (DPR), while independent variables included Current Ratio (CR), Debt to Equity Ratio (DER), Return on Assets (ROA), earnings growth, and firm size (Ln total assets). Multiple regression analysis was applied after classical assumption tests were conducted. The results reveal that leverage has a significant negative effect on dividend policy, whereas liquidity, profitability, earnings growth, and firm size have no significant impact. The adjusted R² of 0.071 indicates that the model explains only 7.1% of the variation in dividend policy, suggesting that other external factors may play a stronger role. This research provides managerial implications for dividend decision-making in consumer goods companies, particularly in managing debt levels to ensure sustainable dividend distribution.

References:

[1] Brigham, E. F., & Houston, J. F. (2021). Fundamentals of financial management (16th ed.) (16th ed.). Cengage Learning.
[2] Eko, M., Musfitria, & Triastuti, I. (2022). The effect of profitability on dividend policy in Indonesian listed firms. Jurnal Akuntansi Indonesia, 11(2), 45–59.
[3] Firmansyah, D. (2020). Capital structure and dividend policy: Evidence from Indonesia. International Journal of Economics and Business Administration, 8(3), 287–298.
[4] Gordon, M. J. (1963). Optimal investment and financing policy. The Journal of Finance, 18(2), 264–272.
[5] Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4).
[6] Lintner, J. (1963). The distribution of incomes of corporations among dividends, retained earnings, and taxes. American Economic Review, 53(2), 97–113.
[7] Madyoningrum, A. (2019). The effect of leverage and firm size on dividend policy. Jurnal Ekonomi Dan Bisnis, 22(1), 15–27.
[8] Maula, F., & Yunati, A. (2019). Liquidity and dividend policy: Evidence from Indonesian manufacturing companies. Jurnal Keuangan Dan Perbankan, 23(3), 377–386.
[9] Miller, M. H., & Scholes, M. (1978). Dividends and taxes. Journal of Financial Economics, 6(4), 333–364.
[10] Permana, D. (2016). Firm size and dividend policy: Evidence from Indonesia. Jurnal Akuntansi Multiparadigma, 7(2), 275–289.
[11] Sekaran, U., & Bougie, R. (2020). Research methods for business: A skill-building approach (8th ed.).

Keywords:

Liquidity, Leverage, Profitability, Earnings Growth, Firm Size, Dividend Policy.