Decoding Financial Performance: The Role of Leverage and Market Risk in Indonesia's LQ45

This study examines the determinants of financial performance in LQ45 Index companies from 2018–2022. It focuses on factors such as equity multiplier, interest coverage, financial leverage, fixed charge coverage, debt to EBITDA, capitalization ratio, and market risk. Control variables include compa...

Full description

Saved in:
Bibliographic Details
Main Authors: Budiman Budiman, Farah Margaretha
Format: Article
Language:Indonesian
Published: Petra Christian University 2024-11-01
Series:Jurnal Akuntansi dan Keuangan
Subjects:
Online Access:https://jurnalakuntansi.petra.ac.id/index.php/aku/article/view/29191
Tags: Add Tag
No Tags, Be the first to tag this record!
_version_ 1832591120061693952
author Budiman Budiman
Farah Margaretha
author_facet Budiman Budiman
Farah Margaretha
author_sort Budiman Budiman
collection DOAJ
description This study examines the determinants of financial performance in LQ45 Index companies from 2018–2022. It focuses on factors such as equity multiplier, interest coverage, financial leverage, fixed charge coverage, debt to EBITDA, capitalization ratio, and market risk. Control variables include company age, sales growth, and firm size. Using multiple regression analysis on data from 48 companies, the study finds that interest coverage, fixed charge coverage, market risk, company age, and sales growth positively impact financial performance, while financial leverage, debt to EBITDA, capitalization ratio, and firm size have a negative effect. The equity multiplier shows no significant influence. The findings suggest maintaining high interest and fixed charge coverage ratios and effective risk management to enhance financial performance. Careful management of high debt to EBITDA levels is necessary to prevent negative impacts. Investors should consider these factors when assessing a company's financial health.
format Article
id doaj-art-b16df52af2c74eaa98f4192a7d49c852
institution Kabale University
issn 1411-0288
2338-8137
language Indonesian
publishDate 2024-11-01
publisher Petra Christian University
record_format Article
series Jurnal Akuntansi dan Keuangan
spelling doaj-art-b16df52af2c74eaa98f4192a7d49c8522025-01-23T03:13:42ZindPetra Christian UniversityJurnal Akuntansi dan Keuangan1411-02882338-81372024-11-0126210.9744/jak.26.2.118-130Decoding Financial Performance: The Role of Leverage and Market Risk in Indonesia's LQ45Budiman Budiman0Farah Margaretha1Universitas TrisaktiUniversitas Trisakti This study examines the determinants of financial performance in LQ45 Index companies from 2018–2022. It focuses on factors such as equity multiplier, interest coverage, financial leverage, fixed charge coverage, debt to EBITDA, capitalization ratio, and market risk. Control variables include company age, sales growth, and firm size. Using multiple regression analysis on data from 48 companies, the study finds that interest coverage, fixed charge coverage, market risk, company age, and sales growth positively impact financial performance, while financial leverage, debt to EBITDA, capitalization ratio, and firm size have a negative effect. The equity multiplier shows no significant influence. The findings suggest maintaining high interest and fixed charge coverage ratios and effective risk management to enhance financial performance. Careful management of high debt to EBITDA levels is necessary to prevent negative impacts. Investors should consider these factors when assessing a company's financial health. https://jurnalakuntansi.petra.ac.id/index.php/aku/article/view/29191Financial performanceindex LQ45leveragemarket risk
spellingShingle Budiman Budiman
Farah Margaretha
Decoding Financial Performance: The Role of Leverage and Market Risk in Indonesia's LQ45
Jurnal Akuntansi dan Keuangan
Financial performance
index LQ45
leverage
market risk
title Decoding Financial Performance: The Role of Leverage and Market Risk in Indonesia's LQ45
title_full Decoding Financial Performance: The Role of Leverage and Market Risk in Indonesia's LQ45
title_fullStr Decoding Financial Performance: The Role of Leverage and Market Risk in Indonesia's LQ45
title_full_unstemmed Decoding Financial Performance: The Role of Leverage and Market Risk in Indonesia's LQ45
title_short Decoding Financial Performance: The Role of Leverage and Market Risk in Indonesia's LQ45
title_sort decoding financial performance the role of leverage and market risk in indonesia s lq45
topic Financial performance
index LQ45
leverage
market risk
url https://jurnalakuntansi.petra.ac.id/index.php/aku/article/view/29191
work_keys_str_mv AT budimanbudiman decodingfinancialperformancetheroleofleverageandmarketriskinindonesiaslq45
AT farahmargaretha decodingfinancialperformancetheroleofleverageandmarketriskinindonesiaslq45