The Influence of Operating Cycle, Cash Flow Volatility, and Audit Fee on Earnings Persistence (The Indonesian Cases)
Research is aiming at analyzing the influence of operating cycle, cash flow volatility, and audit fee on earnings persistence by studying manufacturing companies listed on Indonesia Stock Exchange (IDX). This research studied secondary data from documents in the forms of annual reports and financia...
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| Format: | Article |
| Language: | English |
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Fakultas Ekonomi Universitas Sriwijaya
2020-05-01
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| Series: | Sriwijaya International Journal of Dynamic Economics and Business |
| Subjects: | |
| Online Access: | https://sijdeb.unsri.ac.id/index.php/SIJDEB/article/view/173 |
| _version_ | 1797278238694703104 |
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| author | Douglas Douglas I Gusti Ketut Agung Ulupui Hafifah Nasution |
| author_facet | Douglas Douglas I Gusti Ketut Agung Ulupui Hafifah Nasution |
| author_sort | Douglas Douglas |
| collection | DOAJ |
| description |
Research is aiming at analyzing the influence of operating cycle, cash flow volatility, and audit fee on earnings persistence by studying manufacturing companies listed on Indonesia Stock Exchange (IDX). This research studied secondary data from documents in the forms of annual reports and financial reports of the companies taken from IDX website. After conducting a purposive sampling method, 12 companies were chosen to be the samples with 60 total observations. The data were analyzed by using descriptive statistics and panel data regression using Common Effect Model (CEM) processed by Eviews 10. Earnings persistence as the dependent variable was proxied by the regression coefficient from the regression model of previous year earnings towards the current earnings. The independent variable operating cycle was proxied by the means of accounts receivable turnovers and the means of the inventory turnovers. The cash flow volatility was proxied by the standard deviation of the cash flow operation divided by the total assets. The audit fee was proxied by the natural logarithm of the amount of audit fee. The panel data regression analysis showed that operating cycle has significant influence on earnings persistence. The results explain that companies with shorter operating cycle have high earnings persistence. The results also showed that cash flow volatility and audit fee have no influence on earnings persistence. A short operating cycle can make a company's earnings persistence higher. The implication of this research is a shorter operating cycle can increase the earnings persistence of a company and can increase the interests of investors towards the company.
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| first_indexed | 2024-03-07T16:00:24Z |
| format | Article |
| id | doaj.art-cbea6f58eb3346948864fb91c6824a27 |
| institution | Directory Open Access Journal |
| issn | 2581-2904 2581-2912 |
| language | English |
| last_indexed | 2024-03-07T16:00:24Z |
| publishDate | 2020-05-01 |
| publisher | Fakultas Ekonomi Universitas Sriwijaya |
| record_format | Article |
| series | Sriwijaya International Journal of Dynamic Economics and Business |
| spelling | doaj.art-cbea6f58eb3346948864fb91c6824a272024-03-04T21:53:55ZengFakultas Ekonomi Universitas SriwijayaSriwijaya International Journal of Dynamic Economics and Business2581-29042581-29122020-05-014110.29259/sijdeb.v4i1.1-2092The Influence of Operating Cycle, Cash Flow Volatility, and Audit Fee on Earnings Persistence (The Indonesian Cases)Douglas DouglasI Gusti Ketut Agung Ulupui0Hafifah NasutionJakarta State University Research is aiming at analyzing the influence of operating cycle, cash flow volatility, and audit fee on earnings persistence by studying manufacturing companies listed on Indonesia Stock Exchange (IDX). This research studied secondary data from documents in the forms of annual reports and financial reports of the companies taken from IDX website. After conducting a purposive sampling method, 12 companies were chosen to be the samples with 60 total observations. The data were analyzed by using descriptive statistics and panel data regression using Common Effect Model (CEM) processed by Eviews 10. Earnings persistence as the dependent variable was proxied by the regression coefficient from the regression model of previous year earnings towards the current earnings. The independent variable operating cycle was proxied by the means of accounts receivable turnovers and the means of the inventory turnovers. The cash flow volatility was proxied by the standard deviation of the cash flow operation divided by the total assets. The audit fee was proxied by the natural logarithm of the amount of audit fee. The panel data regression analysis showed that operating cycle has significant influence on earnings persistence. The results explain that companies with shorter operating cycle have high earnings persistence. The results also showed that cash flow volatility and audit fee have no influence on earnings persistence. A short operating cycle can make a company's earnings persistence higher. The implication of this research is a shorter operating cycle can increase the earnings persistence of a company and can increase the interests of investors towards the company. https://sijdeb.unsri.ac.id/index.php/SIJDEB/article/view/173Earnings PersistenceOperating CycleCash Flow VolatilityAudit FeeManufacturing Sector |
| spellingShingle | Douglas Douglas I Gusti Ketut Agung Ulupui Hafifah Nasution The Influence of Operating Cycle, Cash Flow Volatility, and Audit Fee on Earnings Persistence (The Indonesian Cases) Sriwijaya International Journal of Dynamic Economics and Business Earnings Persistence Operating Cycle Cash Flow Volatility Audit Fee Manufacturing Sector |
| title | The Influence of Operating Cycle, Cash Flow Volatility, and Audit Fee on Earnings Persistence (The Indonesian Cases) |
| title_full | The Influence of Operating Cycle, Cash Flow Volatility, and Audit Fee on Earnings Persistence (The Indonesian Cases) |
| title_fullStr | The Influence of Operating Cycle, Cash Flow Volatility, and Audit Fee on Earnings Persistence (The Indonesian Cases) |
| title_full_unstemmed | The Influence of Operating Cycle, Cash Flow Volatility, and Audit Fee on Earnings Persistence (The Indonesian Cases) |
| title_short | The Influence of Operating Cycle, Cash Flow Volatility, and Audit Fee on Earnings Persistence (The Indonesian Cases) |
| title_sort | influence of operating cycle cash flow volatility and audit fee on earnings persistence the indonesian cases |
| topic | Earnings Persistence Operating Cycle Cash Flow Volatility Audit Fee Manufacturing Sector |
| url | https://sijdeb.unsri.ac.id/index.php/SIJDEB/article/view/173 |
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