PENGARUH KINERJA PERUSAHAAN DAN FREE CASH FLOW TERHADAP KEBIJAKAN HUTANG

Abstract

This research aimed to find out the effect of company performance and free cash flow on debt policy. The population was 18 food and bavarage companies which were listed on IDX (2013-2017). The data were secondary, in the form of financial statement. The research was quantitative. Moreover, the data collection technique used purposive sampling, and the sample was on criteria given. In there were 11 companies as sample. The data analysis technique used multiple linier regression as it more than one independent variable. The research result concluded profitability had negative effect because according to the pecking order theory, the main choice in determining funding decisions was to retained earnings. Meanwhile, tangibility and growth did not have positive effect. It meant, the greater the fixed assets and growth, the grater its debt. On the other hand, the business risk had positive effect. It meant, the higher the risk, the lower the level of debt and vice versa. Furthermore, liquidity and free cash flow did not have negative effect. In other words, having high liquidity meant having the ability, free cash flow as it controlled excessively, the debt would be chosen as a source of corporate capital order the reduce agency conflict.
Keywords: company performance, free cash flow, debt policy