The Effect Of Financial Leverage On Performance Of Sharia Compliant Companies Listed In Jakarta Stock Exchange
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| Author | : Siti Kholifatul Rizkiah |
| Publisher | : |
| Total Pages | : 8 |
| Release | : 2018 |
| Genre | : |
| ISBN | : |
Among the requirement set by Otoritas Jasa Keuangan (OJK) for a company to be Sharia compliant is 40% limit on the financial leverage ratio. Taking the Islamic perspective on the limitation of using interest-bearing instrument both as a means of financing and investing, this paper attempts to investigate whether there is a significant relationship between financial leverage and performance of the company. 90 Sharia-compliant companies were selected as a sample in this study and data from 2011-2015 were taken to be observed. Several tests were applied to analyze the data; descriptive analysis, correlation analysis, and multiple regression analysis. Findings revealed that leverage factors (Debt/Asset, Debt/Capital, and ICR) have a significant negative impact to the company performance. However, the magnitude of effect and relations are small and limited. The finding in this study proves that the limitation of the interest-bearing instrument as a means for financing set for the sharia-compliant companies has a good impact on the performance though on a small scale. This negative effect of leverage factors can be explained by the disadvantage of potential financial distress that surpasses the benefit of tax shield from issuing debts.
| Author | : Yunice Tumewang |
| Publisher | : |
| Total Pages | : 8 |
| Release | : 2019 |
| Genre | : |
| ISBN | : |
This study aims to explore the factors that influence the Islamic bank profitability. The profitability rate or Return on Asset (ROA) is utilized as dependent variable whereas internal financial factor (financial ratio indicator) and external factor (economic indicator) are adopted as independent variable. This study focus on social funds such as qard and ZIS contract. This study applies qualitative description with using time series data from March 2010 to September 2014. Moreover, Panel regression model is employed, MWD test and classical assumption test. This analysis finds that, firstly, financial ration and CAR has positive and not significant relationship although equity based financing has significant and positive relationship then in economic indicator results GDP growth and inflation has positively not significant. Furthermore, social funds indicator such in qard contract has positive and significant relationship to ROA or profitability rate. However, the second regression result that utilizes ZIS variable finds that all variables do not have significant relationship excluding GDP growth.
| Author | : Siti Kholifatul Rizkiah |
| Publisher | : |
| Total Pages | : 11 |
| Release | : 2018 |
| Genre | : |
| ISBN | : |
The Sharia investment principles give Muslim investors a restriction in picking stocks under their investment portfolio. There are strict rules that must be followed to make a security or a company Sharia-compliant. The argument whether the performance of Sharia-compliant stocks is better compared to the conventional stocks still remains an open question. This paper aims to review and analyze whether Islamic stocks outperform Conventional stocks when the market is doing well (bull periods) and sustain better when the market is in the downturn (bear periods). Our finding shows a statistically insignificant difference in average return, market risk (beta), and total risk (standard deviation) between Islamic and Conventional stocks in both bull and bear periods. However, the data shows a consistent result that Islamic stocks return are higher during both bull and bear periods. Islamic stocks also show higher risk during bear periods proven with higher standard deviation and beta. However, it is less volatile during the bull period as compared to conventional stocks. Furthermore, the investigation of two types of stocks using risk-adjusted returns ratios shows that both stocks behave in a similar way. However, the Islamic stock market performed better than the conventional stock market during the bear 1 and bear 3 (Global financial crisis 2008) shown by higher performance in all three ratios although it is not statistically significant.
| Author | : Racha Makke |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2016 |
| Genre | : |
| ISBN | : |
| Author | : Lafte Sarkhe |
| Publisher | : |
| Total Pages | : 7 |
| Release | : 2016 |
| Genre | : |
| ISBN | : |
This study investigated the effect of company financial leverage and growth opportunities on the investment decisions using information on Iranian companies listed on Tehran Stock Exchange. This paper aims to answer is whether financial leverage influences the investment decisions in Iranian context. By answering this question, the author attempts to add to the existing literature by bringing new evidence on the relationship between leverage and investment decisions of firms listed in Tehran Stock Exchange in Iran. For the study purpose, the 83 companies with the desired condition were selected for this purpose and panel data with fixed effects was used to test hypotheses. The results of this research show that companies with higher Financial Leverage adjust their investment decisions. The results of this study can be used by shareholders, managers and finance researchers.
| Author | : Erika Jimena Arilyn |
| Publisher | : |
| Total Pages | : 7 |
| Release | : 2019 |
| Genre | : |
| ISBN | : |
Objective - This research is conducted in order to determine what factors in corporate governance affect the financial performance of a firm.Methodology/Technique - Financial performance, as the dependent variable, is measured by Return on Asset (ROA), while the independent variables (corporate governance) are measured using Board Independence, Board Size, Dividend, Firm Size, and Financial Leverage. The sampling method used in this research is purposive sampling. The requirements for the sample of this research are the non - financial firms included in LQ-45 from 2012 to 2017 that publish annual reports that are available to the public. The research method used in this paper is a quantitative method. Panel data analysis technique and E-views tools were also used.Findings - The results indicate that firm size and percentage of board independence has no effect on financial performance, while board size, dividends, and financial leverage all effect financial performance.Novelty - The study adds to the literature of corporate government and firm performance in emerging countries.Type of Paper - Empirical.
| Author | : Tulus Suryanto |
| Publisher | : Springer Nature |
| Total Pages | : 256 |
| Release | : 2024-01-03 |
| Genre | : Science |
| ISBN | : 2384761129 |
This is an open access book.It is our great pleasure to announce the International Conference on Sustainability in Technological, Environmental, Law, Management, Social and Economic Matters (ICOSTELM 2022, host to host) and we would like to invite you to participate in the event. The conference will be held on 04 – 05 November 2022 in hybrid .The main objective of the multidisciplinary conference is to provide a platform for researchers, professionals, scholars and academicians to exchange and share their knowledge, information, new ideas and experience in person with their peers expected to join from different parts on the world. This gathering will help the delegates to establish research or business relations as well as to find international linkage for future collaborations in their career path. We hope that ICOSTELM 2022 outcome will lead to significant contributions to the knowledge base in these up-to-date scientific fields in scope. In addition, this conference will also offer opportunities for academicians, researchers, engineers, economist, entrepreneurs, journalist, and industry experts to meet and interact with local and international participants. This conference is organized by STEBI Lampung Indonesia, Coorporation With Asia e University Malaysia, Universiti Teknologi MARA (UITM) Shah Alam, Universiti Teknologi MARA (UITM) Cawangan Pulau Pinang Malaysia , International Balkan University Skopje North Macedonia, Geomatica Universiti College Malaysia, Faculty of Law Universitas Diponegoro , Universitas Pembangunan Veteran Jakarta , Universitas Islam Negeri Datokarama Palu, Universitas Jenderal Achmad Yani (UNJANI) Bandung, Universitas Sultan Ageng Tirtayasa Banten, Universitas Tarumanegara, Universitas Islam Negeri Antasari Banjarmasin and Magister Ilmu Pemerintahan FISIP - UNILA
| Author | : Devi Lusyana |
| Publisher | : |
| Total Pages | : |
| Release | : 2020 |
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| ISBN | : |
Purpose: The purpose of this paper is to investigate the impact of the Indonesia Shariah-compliant Stock Index (ISSI) on the performance of included shares. In essence, the authors ask whether the establishment of the ISSI provides abnormal returns for the firms that are not included in the Jakarta Index.Design/methodology/approach: The authors use an event study methodology to estimate cumulative abnormal returns in the days surrounding the event to examine the relationship between Shariah-compliant investments and stock returns. The estimation window of 90 trading days prior to the event (-30) to day 60 after ( 60) is adopted. They also use a range of investment performance measures to provide new evidence on whether faith-based ethical investments generate superior performance compared to their unscreened benchmarks.Findings: Using daily returns, the Indonesia ISSI and panel data model, the findings show that the inclusion of the ISSI has a positive impact on the financial performance of the included shares during the 41-day event window. The evidence also suggests that the ethical investment has a significant influence on the performance of stock market returns.Research limitations/implications: This study offers insights to policymakers, investors and fund managers interested in the indices' performance. A key conclusion that could be derived by bodies that regulate Islamic products and services is that investors are not only concerned about what is profitable but also what makes their investments ethical.Originality/value: Although the global growth of the Islamic capital market products and services has been tremendous in recent years, very few studies focus on the Indonesian market and indeed, none of them devote sufficient attention to Shariah-compliant investments and stock returns.
| Author | : Bima Cinintya Pratama |
| Publisher | : European Alliance for Innovation |
| Total Pages | : 1100 |
| Release | : 2022-08-23 |
| Genre | : Business & Economics |
| ISBN | : 1631903640 |
The 3rd International Conference of Business, Accounting, and Economics (ICBAE) 2022 continued the agenda to bring together researchers, academics, experts and professionals in examining selected themes by applying multidisciplinary approaches. This conference is the third intentional conference held by the Faculty of Economics and Business, Universitas Muhammadiyah Purwokerto and it is a bi-annual agenda of this faculty. In 2022, this event will be held on 10-11 August at the Faculty of Economics and Business, Universitas Muhammadiyah Purwokerto. The theme of the 3rd ICBAE UMP 2022 is “Innovation in Economic, Finance, Business, and Entrepreneurship for Sustainable Economic Development”. It is expected that this event may offer a contribution for both academics and practitioners to conduct research related to Business, Accounting, and Economics Related Studies. Each contributed paper was refereed before being accepted for publication. The double-blind peer review was used in the paper selection.
| Author | : Sadaf Mustafa |
| Publisher | : |
| Total Pages | : 7 |
| Release | : 2017 |
| Genre | : |
| ISBN | : |
This paper studies the effect of financial leverage and market size of selected stocks on stock returns. Ordinary Least Square (OLS) regression models were used to test the relationship between the dependent and independent variables. The leverage of the selected sector was estimated from the Annual Financial reports covering a period of twelve years from 2014 to 2015 non-financial sectors listed in Karachi Stock Exchange. Furthermore, stock index prices of the selected stocks between 2004-2015 for non-financial sector are used to calculate stock return. Capital structure decisions are very important for any firm because they have a direct impact on firm value as well as shareholder's wealth. The positives or negatives of these decisions determine the future value of any business. Some studies discussed multiple outcomes or relation between stock return and leverage. Some studies reveal positive relationship between them, some review show negative outcomes and some has blended results. The study concluded that there is statistically significant direct relationship between size which is proxy of market capitalization and stock return (100 index prices). However, there is feeble and inverse relationship between financial leverage and stock return, and this relationship is not significant, so there is no statistically significant relationship between financial leverage and shareholders return.
