Analysis of Differences in Financial and Market Performances That Do or Do Not Practice Income Smoothing
DOI:
https://doi.org/10.24843/Keywords:
Return on Assets, Current Ratio, Debt-to-Equity Ratio, Stock Return, Stock Risk, Income SmoothingAbstract
This study aims to examine differences in profitability, liquidity, leverage, stock returns, and share risk in real estate companies that do and do not practice income smoothing. The population of this study is companies publicly traded on the Indonesian Stock Exchange in the period 2015 to 2017, from which sample of 32 companies was acquired for each of the three years of the study, giving 96 items in total. The indicators used in the study are return on assets (ROA) to measure profitability, current ratio (CR) to measure liquidity, debt-to-equity ratio (DER) to measure leverage, capital gains from stock prices to measure stock returns, and standard deviation of stock returns to measure stock risk. Because the data is not normally distributed, both independent samples t-testing and Mann-Whitney t-testing are used to discover if there are differences in liquidity, profitability, leverage, average stock prices, and stock returns between companies that carry out income smoothing and those that do not. The results of the study show that there is no difference in ROA, CR, DER, stock returns, and share risk between income-smoothing and non-income-smoothing companies.
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