Title:
THE EFFECT OF FINANCIAL POLICIES ON FIRM PERFORMANCE: EVIDENCE FROM INDONESIA STOCK EXCHANGE

Authors:
Samsu Anhari Faujianto and Atmaji

Abstract:
This study aims to determine the effect of financial decisions on firm performance. Firm performance can be achieved through the implementation of proper financial management functions that affect the firm's survival. In Indonesia, the property, real estate, and building construction sectors are one of the factors that support economic growth. The role of this sector is quite important for the Indonesian economy. Based on data from the BPS, in 2018 this sector contributed 13.85% to the national economy. This research method using quantitative methods. Samples were taken using a purposive sampling method based on certain criteria. The sample in this study is the property, real estate, and building construction sector companies listed on the Indonesia Stock Exchange for the 2015-2019 period, totaling 40 companies. In this study using financial decision variables with the proxy of Total Asset Growth (TAG), Price Earning Ratio (PER), Debt to Asset Ratio (DAR), Debt to Equity Ratio (DER), and Current Ratio (CR). While the firm performance variable uses the proxy Return On Equity (ROE). Also, the control variables used are inflation and firm size. The data obtained in this study were processed using the STATA 16 analysis tool.

Keywords:
Financial Decisions, Investment Decision, Funding Decision, Inflation, Firm Size, Firm Performance.

DOI:
http://dx.doi.org/10.37500/IJESSR.2020.3613