PERSISTENSI LABA DITINJAU DARI KOMPONEN PEMBENTUK LABA

Tri Utami

Abstract


Earning persistence influenced by the components of its own earnings, accruals and cash
which negative or positive, if it’s positive will be distributed to dividends, buy more share,
pay debts and interest, and also financial assets increase. If negative, the company must be
efficient, such as adding capital funds, debt or reduce cash owned. Previous research tested
the persistence of the accrual and cash income components but was not specific because
without looking at the composition, specific testing to determine the persistence level of free
cash flow, the result of the accrual earnings component and the less persistent cash. This
research proposes a hypothesis that free cash flow components held by the firm will show a
lower persistence than the distributed free cash flow component. A positive free cash flow
can be distributed to shareholders in the form of dividend payments or to buy shares again.
So, free cash flow of shareholders will be more persistent than free cash flows which
distributed to creditors. We used secondary data on this research which can be obtained from
OSIRIS database. This research gets sample from all companies that have been listed on the
Stock Exchange, and year of observation between 2006-2015. Research variable use the
income variable, where the income itself consists of accruals and free cash flow. The results
indicate that the free cash flow component is dominated by free cash flows retained rather
than the free cash flow which distributed.
Keywords: earnings persistence, free cash flow, cash, accrual


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