Analysis of the Effect of Current Ratio, Debt to Equity Ratio, Return on Assets, and Company Size on Derivative Hedging Decision Making in Pharmaceutical Companies
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Oct 14, 2022
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Abstract
This study aims to examine the effect of current ratio, debt to equity ratio, return on assets, and firm size on derivative hedging decision making in pharmaceutical companies listed on IDX 2010-2019. The population of this study is 11 companies. Purposive sampling is used as a sampling technique and obtained 10 companies as samples. The data collection technique is carried out by documentation study of Financial Statements and Notes to the Financial Statements in Annual Report 2010-2019 of each sample company obtained from the IDX website (idx.co.id) and the websites of each sample company. The data analysis technique used is logistic regression. The results of this study indicate that there is no significant effect of current ratio, debt to equity, and return on assets on derivative hedging decision making and there is positive and significant effect of firm size on derivative hedging decision making. Therefore, if firm size (total assets) is relatively higher compared to other pharmaceutical companies, the company should consider doing derivative hedging more because the company is more likely to experience financial distress from the higher exchange rate risk received.
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How to Cite
Windy Pujana, Dadan Ramdhan, & Danang Indrajaya. (2022). Analysis of the Effect of Current Ratio, Debt to Equity Ratio, Return on Assets, and Company Size on Derivative Hedging Decision Making in Pharmaceutical Companies. Enrichment : Journal of Management, 12(4), 2804-2813. https://doi.org/10.35335/enrichment.v12i4.567
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Zahid, P. F., Zulqernain, N. S., & Ahmad, N. (2016). Malaysian Corporation Analysis on Hedging Determinants and Performance. Journal of Contemporary Social Science Research, 1(1), 58–70.
Astyrianti, N. N., & Sudiartha, G. M. (2017). Pengaruh Leverage, Kesempatan Tumbuh, Kebijakan Dividen dan Likuiditas terhadap Keputusan Hedging PT. Unilever Tbk. E-Jurnal Manajemen Universitas Udayana, 6(3), 1312–1339.
Bank Indonesia. (2020a). Transmisi Kebijakan Moneter. https://www.bi.go.id/id/moneter/transmisi-kebijakan/Contents/Default.aspx
Bank Indonesia. (2020b). Kurs Transaksi Bank Indonesia. https://www.bi.go.id/id/statistik/informasi-kurs/transaksi-bi/Default.aspx
CNN Indonesia. (2020). Efek Pandemi, Jokowi Ajak Reformasi Sistem Kesehatan Nasional. https://www.cnnindonesia.com/ekonomi/20201105122530-532- 566235/efek-pandemi-jokowi-ajak-reformasi-sistem-kesehatan-nasional
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Dharmiyanti, N. M. D., & Darmayanti, N. P. A. (2020). The Influence of Liquidity, Growth Opportunities, and Firm Size on Non-Finance Companies’ Hedging Policy in Indonesia Stock Exchange. American Journal of Humanities and Social Sciences Research, 4(1), 129–135.
Gewar, M. M., & Suryantini, N. P. S. (2020). The Effect of Leverage, Managerial Ownership, and Dividend Policy on Hedging Decisions in Manufacturing Companies. American Journal of Humanities and Social Sciences Research, 4(1), 382–389.
Ghozali, I. (2018). Aplikasi Analisis Multivariate dengan Program IBM SPSS 25 (9th ed.). Badan Penerbit Universitas Diponegoro.
Huang, C., Wang, Y., Li, X., Ren, L., Zhao, J., Hu, Y., Zhang, L., Fan, G., Xu, J., Gu, X., Cheng, Z., Yu, T., Xia, J., Wei, Y., Wu, W., Xie, X., Yin, W., Li, H., Liu, M., Cao, B. (2020). Clinical Features of Patients Infected with 2019 Novel Coronavirus in Wuhan, China. The Lancet, 395(10223), 497–506.
Indrajaya, D. (2019). The Influence of Profitability and Solvency Ratios on Stock Prices with Inflation as Moderating Variable (Case Study on BUMN). International Journal of Technology And Business, 3(2), 1–10.
Indrajaya, D. (2022). Relationship of Inflation, BI Rate and Deposit Interest Rate. 3(3), 401–407. https://doi.org/10.47065/ekuitas.v3i3.1108
Indrajaya, D., Astuti, M., Maulidizen, A., & Kurniawan, N. (2021). The Effect of Third-Party Funds , Capital Adequacy Ratio , Casa Ratio , Bi Rate , And Inflation Towards The Distribution of Credit Banking in Indonesia. 2(2), 171–185.
Indrajaya, D. (2022). Efektivitas Kebijakan Moneter Non Konvensional pada BPD Indonesia di Masa Pandemi. 3(3), 376–379. https://doi.org/10.47065/ekuitas.v3i3.1061
Kuncoro, M. (2019). Metode Kuantitatif: Teori dan Aplikasi untuk Bisnis dan Ekonomi (5th ed.). UPP STIM YKPN.
Madura, J. (2018). International Financial Management (13th ed.). Cengage Learning.
Mahasari, A. A. K. R., & Rahyuda, H. (2020). The Effect of Firm Size, Leverage, and Liquidity on Hedging Decisions of Consumer Goods Industry on the Indonesia Stock Exchange. American Journal of Humanities and Social Sciences Research, 4(10), 106–113.
Nyamweya, L. N., & Ali, I. (2016). Determinants of Hedging Foreign Currency Risk in Kenya: A Survey of Tea Exporting Companies in Mombasa County. Imperial Journal of Interdisciplinary Research, 2(6), 740–757.
Ramdhan, D., & Indrajaya, D. (2019). The Effect of Financial Ratios on Stock Prices with Exchange Rates as a Moderating Variable (Study of BUMN Companies in the Construction Services and Basic Industries Sector Listed on the Indonesia Stock Exchange in 2014-2018). INTERNATIONAL JOURNAL OF TECHNOLOGY AND BUSINESS (IJTB), 3(2), 42–55.
Sahoo, C. A. (2016). Pattern of Corporate Hedging Through Financial Derivatives in Non-Financial Companies of India. Journal of Commerce and Management Thought, 7(3), 444–477. https://doi.org/10.5958/0976- 478x.2016.00026.4
Sarwono, J. (2018). Statistik untuk Riset Skripsi (E. Kurnia (ed.)). Penerbit Andi.
Sasmita, I. E., & Hartono, U. (2019). Karakteristik Perusahaan, Financial Distress, dan Keputusan Hedging: Studi pada Perusahaan Manufaktur di Indonesia. Jurnal Ilmu Manajemen, 7(3), 655–667.
Satgas Penanganan COVID-19. (2020). Data Sebaran Indonesia. https://covid19.go.id/
Sofia, R., & Yuneline, M. H. (2019). Determinasi Pengambilan Keputusan Lindung Nilai pada Instrumen Derivatif Valuta Asing. ISEI Business and Management Review, III (1), 16-25. https://doi.org/https://doi.org/10.36217/ibmr.v3i1.82
Sugiyono. (2016). Metode Penelitian Kuantitatif, Kualitatif, dan R&D. Alfabeta.
Sugiyono. (2018). Metode Penelitian Manajemen (Setiyawami (ed.)). Alfabeta.
Supriyatna, I., & Djailani, M. F. (2020). Perjalanan Nilai Tukar Rupiah Selama Masa Pandemi Covid-19. Suara.Com. https://www.suara.com/bisnis/2020/07/10/112348/perjalanan-nilai-tukar-rupiah-selama-masa-pandemi-covid-19? page=all.
Thomas, V. F. (2020). Babak Belur Ekspor & Impor Indonesia di Tengah.
Utomo, L. P., & Hartanti, B. (2020). Determinan Pengambilan Keputusan Hedging Menggunakan Instrumen Derivatif Valas. Management and Business Review, 4(1), 22–31. https://doi.org/10.21067/mbr.v4i1.4611
Yudistira, G. (2018). Bank Indonesia Proyeksi Bisnis Hedging Akan Makin Semarak di 2018. Kontan.Co.Id. https://keuangan.kontan.co.id/news/bank- indonesia-proyeksi-bisnis-hedging-akan-makin-semarak-di-2018
Zahid, P. F., Zulqernain, N. S., & Ahmad, N. (2016). Malaysian Corporation Analysis on Hedging Determinants and Performance. Journal of Contemporary Social Science Research, 1(1), 58–70.