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Effect of Profitability, Financial Leverage, Net Profit Margin (NPM) Toward The Income smoothing In Manufacturing Companies Sector Consumer Goods Industry that listing on the Indonesia Stock Exchange (IDX)
Yussie Farlina
Gunadarma University
u_see_moetiq@yahoo.com
Income Smoothing) is the way that management used to reduce fluctuations in reported earnings to match the desired target either artificially (through method of accounting) or in real terms (through the transaction). The income smoothing generally regarded as the measures undertaken by management to achieve certain purposes. However, this practice has been criticized by many because it can lead to disclosure in the financial statements. The next result, the financial statements no longer reflect the real situation about the things that happened in the company who should have known by the users of financial statements.
This research was designed to examine the factors that influence the practice of income smoothing that profitability (ROA), Financial Leverage, Net Profit Margin (NPM). The separation between companies that perform smoothing earnings and that do not perform by using Index Eckel against operating profits for manufacturing companies listed on the BEI. Research samples totaling 12 manufacturing companies doing income smoothing over a period of five years from 38 companies manufacturing consumer goods sector.
The Results of research using Multiple Linear Regression and hypothesis testing done partially is that there are two factors that do not affect income smoothing practices of Profitability and Net Profit Margin (NPM), which affects only the Financial Leverage factor. While for the hypothesis test all three simultaneously or simultaneously did not affect significantly to the practice of income smoothing.
Keywords: Income Smoothing, Profitability, Financial Leverage, Net Profit Margin (NPM), Manufacturing and Consumer Goods Industry sector
