| Summary: | The objectives of this study was examine pecking order theory in food and
beverages industries in Indonesia. Additionally, it is specifically focused on
investigating the influence of tangibility ratio, Profitability, Growth, Firm Size and
Debt to Total Assets of the past variables to leverage in food and beverages the
companies during the period 2005-2009.
This study used 18 samples of stock in food and beverages industries that have
completed and audited financial statement during the period of 2005-2009. This
study applied the method of hypothesis testing with multiple linear regression
analysis model, and the classical assumptions. The results showed that the ratio of
Profitability and Debt to Total Assets past significant effect on leverage, while the
ratio of tangibility, Growth, and Firm Size no significant effect on leverage. The
result shows that there is an indication of pecking order theory contribution in the
financial decisions process among the food and beverages companies within the
Indonesian stock market.
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