The Effect of Free Cash Flow Agency Problem on the Value Relevance of Earnings and Book Value

2008 ◽  
Vol 6 (1) ◽  
pp. 75-90 ◽  
Author(s):  
Aulia Fuad Rahman ◽  
Norman Mohd‐Saleh
Keyword(s):  
Cash Flow ◽  
Value Relevance ◽  
Agency Problem ◽  
Free Cash Flow ◽  
Book Value

scholarly journals MASALAH KEAGENAN ALIRAN KAS BEBAS, MANAJEMEN LABA DAN RELEVANSI NILAI INFORMASI AKUNTANSI

2018 ◽  
Vol 15 (2) ◽  
pp. 232-246
Author(s):  
Aulia Fuad Rahman
Keyword(s):  
Earnings Management ◽  
Cash Flow ◽  
Stock Price ◽  
Value Relevance ◽  
Agency Problem ◽  
Free Cash Flow ◽  
Potential Conflict ◽  
Book Value ◽  
Negative Effect ◽  
The Impact

Free cash flow agency problem causes potential conflict of interest between managers and shareholders. Managers of firms with high free cash flow and of low growth opportunity tend to invest in marginal or even negative NPV project and use earnings management to camouflage the effects of non-wealth-maximizing investments. As a result, it is predicted that investors will react to earnings management and free cash flow agency problem and therefore reflected in stock price. In this sense, earnings management and free cash flow agency problem is predicted to have an impact on value relevance of accounting information.The objective of this study is to assess the impact of earnings management on value relevance of earnings and book value. This study also investigates the different effect of earnings management on value relevance of earnings and book value between free cash flow agency problem firms and non free cash flow agency problem firms. Result shows that earnings and book value are value relevance and earnings management decreases those value relevances. The result also conclude that the negative effect of earnings management on value relevance of earnings and book value is higher for free cash flow agency problem firms compared to non free cash flow agency problem firms.

scholarly journals MASALAH KEAGENAN ALIRAN KAS BEBAS, MANAJEMEN LABA DAN RELEVANSI NILAI INFORMASI AKUNTANSI

2017 ◽  
Vol 15 (2) ◽  
pp. 232
Author(s):  
Aulia Fuad Rahman
Keyword(s):  
Earnings Management ◽  
Cash Flow ◽  
Stock Price ◽  
Value Relevance ◽  
Agency Problem ◽  
Free Cash Flow ◽  
Potential Conflict ◽  
Book Value ◽  
Negative Effect ◽  
The Impact

Free cash flow agency problem causes potential conflict of interest between managers and shareholders. Managers of firms with high free cash flow and of low growth opportunity tend to invest in marginal or even negative NPV project and use earnings management to camouflage the effects of non-wealth-maximizing investments. As a result, it is predicted that investors will react to earnings management and free cash flow agency problem and therefore reflected in stock price. In this sense, earnings management and free cash flow agency problem is predicted to have an impact on value relevance of accounting information.The objective of this study is to assess the impact of earnings management on value relevance of earnings and book value. This study also investigates the different effect of earnings management on value relevance of earnings and book value between free cash flow agency problem firms and non free cash flow agency problem firms. Result shows that earnings and book value are value relevance and earnings management decreases those value relevances. The result also conclude that the negative effect of earnings management on value relevance of earnings and book value is higher for free cash flow agency problem firms compared to non free cash flow agency problem firms.

scholarly journals Agency cost of type I and accounting numbers in Australia and India

2016 ◽  
Vol 13 (4) ◽  
pp. 307-316 ◽  
Author(s):  
Lious Ntoung Agbor Tabot ◽  
Outman Ben Chettah ◽  
Eva Masárova
Keyword(s):  
Cash Flow ◽  
Manufacturing Industry ◽  
Value Relevance ◽  
Agency Problem ◽  
Agency Cost ◽  
Free Cash Flow ◽  
Service Industries ◽  
Type I ◽  
Book Value ◽  
Accounting Numbers

This paper has as objective to assess the agency cost of type I on the value relevance of accounting numbers (earnings and book value) for all listed firms in the manufacturing, retailing and service industries in Australia and India from 2005 to 2012 using the modified version of the Ohlson’ model in Faud and Mohd, (2008) where price is express as a linear function of earnings, book value and various accounting numbers. As predicted, the results show that both earnings and book value are value relevance for the manufacturing, retailing and servicing industry in Australia and India. The presence of the free cash flow agency problem caused the value relevance of earnings and book value to decline in Australia and India. However, the effect is not stable across the difference industries. The results show that in the manufacturing industry, the effect caused by the free cash flow agency problem is relatively higher for Australia and India than in the retail and service industries. As a result, the firms in the manufacturing with free cash flow agency problem have lower earnings (book value) coefficients than those without free cash flow agency problem

PENGARUH KEBIJAKAN DIVIDEN DALAM MEMODERASI FINANCIAL PERFORMANCE TERHADAP RETURN SAHAM PADA SEKTOR PERTANIAN YANG TERDAFTAR DI BURSA EFEK INDONESIA

2019 ◽  
Vol 8 (1) ◽  
Author(s):  
YOPINUS BOBI B2041171022
Keyword(s):  
Financial Performance ◽  
Stock Returns ◽  
Cash Flow ◽  
Financial Management ◽  
Dividend Policy ◽  
Control Variable ◽  
Negative Influence ◽  
Free Cash Flow ◽  
Book Value ◽  
New Instrument

This study aimed to examine the effect of dividend policy proxy by Dividend Payout Ratio as a moderation of financial performance proxy by Debt to Equty Ratio, Free Cash Flow and Price to Book Value as well as inflation as a control variable for stock returns. The research method used was quantitative study using SPSS 20 assistance, the population in this study were agricultural companies listed on the Indonesia Stock Exchange during the period between 2013 and 2017. Samples were selected by purposive sampling technique with the criteria of continually having financial statements from 2013 to 2017. The results show that inflation and Debt to Equty Ratio have a negative influence on stock returns. Whereas Free Cash Flow and Price to Book Value have a positive influence on stock returns. Other results show that dividend policy does not moderate inflation and Debt to Equty Ratio to stock returns. In this case dividend policy applies as a potential moderation variable. Whereas  Free Cash Flow and Price to Book Value have an influence on stock returns through dividend policy, in this case the policy dividend applies as a pure moderation variables. Recommendations for this study are expected to further add other variables that are thought to influence stock returns to be the object of research both internal and external factors. Examining returns in other business sectors that are still rarely studied. Increase the time period of the study because it will better know how the effect occur if the study is conducted in a longer period. Keywords : Financial Performance, Stock Return, Dividend PolicyDAFTAR PUSTAKAAndiantyo, Prakosa., Sihombing, Pardomuan, dan Kusumastuti Yani, S. (2018). Pergerakan Indeks Harga Saham Sektor Pertanian Di Bursa Efek Indonesia. Buku 2 : “Hukum, Politik, Manajemen, Ekonomi, Akuntansi, Konseling, Desain dan Seni Rupa. ISSN (P) : 2460 – 8696. ISSN (E) : 2540 – 7589.Agus, Sartono.(2014).Manajemen Keuangan:Teori dan Aplikasi. Edisi Keempat. Yogyakarta:BPFE Arikunto, S. (2013). Prosedur Penelitian. Jakarta: Rineka Citra Anwar Sanusi. (2011). Metode Peneltian Bisnis. Jakarta: Salemba Empat. Bambang, Riyanto. (2001). Dasar-Dasar Pembelanjaan Perusahaan. Edisi Keempat, Cetakan Ketujuh. BPFE. Yogyakarta Brigham, Eugene.F dan Joel F. Houston. (2006). Fundamental Of Financial Mangement, Dasar-dasar Manajemen Keuangan, Buku satu, Edisi Sepuluh, Alih bahasa Oleh Ali Akbar Yulianto . Jakarta: Salemba Empat.                                                                        . (2014). Dasar-dasar Manajemen Keuangan. Penerjemah Ali Akbar Yulianto. Jakarta: Salemba Empat. Brigham, Eugene F., dan Daves, Philip R., 2004, Intermediate Financial Management, Eight Edition, Thomson, South-Western, Mason, Ohio, USA. Bungin, B. (2013). Metodologi Penelitian Sosial & Ekonomi (format-format Kuantitatif dan Kualitatif Untuk Studi Sosiologi, Kebijakan Publik, Komunikasi, Manajemen, dan Pemasaran. Jakarta: Kencana Prenada Media Group. Darmadji, Tjiptono dan Hendy M. Fakhruddin. (2006). Pasar Modal di Indonesia. Salemba Empat. Jakarta. Fahmi, Irham. (2012). Pengantar Pasar Modal. Edisi 1. Alfabeta. Bandung. Ghozali, I. (2006). Aplikasi Analisis Multivariate dengan Program SPSS. Semarang: Badan Penerbit Universitas Diponegoro.                  . (2009). Aplikasi Analisis Multivariate dengan Program SPSS. Semarang: Badan Penerbit Universitas Diponegoro. Husnan, S. (2001). Dasar-dasar Teori Portofolio dan Analisis Sekuritas, Edisi Keempat, UPP AMP YKPN Yogyakarta. Indrawati, Ph.D. (2015). Metode Penelitian Manajemen dan Bisnis. Bandung: PT. Refika Aditama. Jogiyanto. (2009). Teori Portofolio dan Analisis Investasi, Edisi Keempat cetakan ke 1. Yogyakarta: BPFE. Kasmir. (2010). Pengantar Manajemen Keuangan. Jakarta: Kencana            . (2011). Analisa Laporan Keuangan. PT Raja Grafindo Persada. Jakarta.            . (2012). Analisa Laporan Keuangan. PT Raja Grafindo Persada. Jakarta. Kurniadi, Arif., Achsani Noer, A., & Sasongko, Hendro. (2013) Kinerja Keuangan Berbasis Penciptaan Nilai, Faktor Makroekonomi dan Pengaruhnya Terhadap Return Saham Sektor Pertanian. Jurnal Akuntansi dan Keuangan. 15 (2): 63-74. M. Iqbal. (2012). Pokok-pokok Materi Statistik (Stastistik Deskriptif). Jakarta: Bumi Askara Munawir, S. (2014). Analisis Laporan Keuangan. Yogyakarta: liberty Peni R. Pramono. 2008. Menilai Kinerja Manajer Lewat Laporan Keuangan. Jakarta: PT. Gramedia Riduwan. (2015). Belajar Mudah Penelitian Untuk Guru-Karyawan dan Peneliti Semula. Bandung: Alfabeta Riyanto, Bambang. (2001). Dasar-dasar Pembelajaran Perusahaan. Edisi Keempat, Cetakan ketujuh: BPFE Yogyakarta Sapto, Rahardjo (2006). Kiat Membangun Aset Kekayaan. Elex Media Komputindo, Jakarta. Samsul, Mohammad. (2006). Pasar Modal dan Manajemen portofolio. Erlangga: Jakarta. Sarwono, J. (2011). Path Analisis. Jakarta: PT Alek Media Komputindo Sawir, A. (2009). Analisa Kinerja Keuangan dan Perencanaan Keuangan Perusahaan. Jakarta: PT. Gramedia Pustaka Utama. Sugiyono. (2012). Statistik Untuk Penelitian. Bandung: Alfabeta ________. (2014). Metode Penelitian Kuantitatif Kualitatif dan R & D. Bandung: Alfabeta. ________.(2015). Metode Penelitian Tindakan Komprehenssif. Bandung: Alfabeta Suharyoko. (2012). Analsiis Pengaruh Debt Equty Ratio (DER) dan Earning Per Share (EPS) terhdap harga saham ektor perbankan yang terdapat di BEI. Tesis Universitas Tanjungpura Pontianak: Tidak diterbitkan Suharyadi dan Purwanto, S.K (2008). Statistika untuk Ekonomi dan Keungan Modern. Jakarta: Salemba Empat. Aggarwal., Bhasin., Sharma., Chhabra., Rajoura. (2005). A New Instrument (Scale) for Measuring the Socioeconomic Status of a Family : Preliminary Study. Indian Journal of Community Medicine, 30(4), 111-114. Supadi Dwi Budi Prasetyo & Amin M. Nuryatno. (2012) Pengaruh Faktor Fundamental Dan Risiko Sistematis Terhadap Return Saham Syariah. Media Riset Akuntansi, Auditing & Informasi. 12 (1). Supriyadi,Yoyon & Senjaya, Edih. (2013) Pengaruh Kinerja Keuangan  Terhadap Harga Saham. Jurnal Ilmiah Ranggagading. 13(1): 31-44. Suryabrata, S. (2008). Metodologi Penelitian. Jakarta: Raja Grafindi Persada Tandelilin, Eduardus. (2001). Analisis Investasi dan Manajemen Risiko. Edisi Pertama, Yogyakarta: BPFE. Sutrisno. (2012). Manajemen Keuangan Teori, Konsep, dan Aplikasi. Ekonisia, Kampus Fakultas Ekonomi UII. Jakarta. Subramanyam, K.R. dan John J. Wild. (2010). Analisis Laporan Keuangan (Financial Statement Analysis). Edisi Kesepuluh. Terjemhan Dewi Yanti. Jilid 2. Jakarta: Salemba Empat.

scholarly journals Investigation on the value relevance of accounting information: evidence from incorporated companies in the Singapore capital market

2016 ◽  
Vol 13 (3) ◽  
pp. 9-21 ◽  
Author(s):  
Basil Abeifaa Der ◽  
Petr Polak ◽  
Masairol Masri
Keyword(s):  
Earnings Management ◽  
Cash Flow ◽  
Capital Market ◽  
Value Relevance ◽  
Accounting Information ◽  
Book Value ◽  
Valuation Model ◽  
Long Run ◽  
Short Run ◽  
Asset Turnover

The purpose of this study is to investigate the relative, incremental and the systematic changes in value relevance of the accounting information. This study also attempts to investigate the effect of earnings management on the value relevance of accounting information. It basically uses Ohlson’s (1995) valuation model to test the conceptual framework. The findings of this paper reveal that book value is more value relevant and incremental followed by earnings and, then, cash flow. Cash flow, however, performs a lesser valuation role. The results also show that combined book value and earnings are more value relevant than combined book value and cash flow. As a third contribution, the paper also finds that the value relevance of some accounting variables has increased over time, while others showed no evidence of their inclined or declined patterns in the value relevance of accounting information. Finally, the paper finds that earnings management has no effect on the value relevance of accounting information. Further analyses suggest that earnings management is opportunistic in the short run, but efficient in the long run, when firms are small or have high asset turnover

scholarly journals FAKTOR-FAKTOR YANG MEMPENGARUHI INVESTMENT OPPORTUNITY SET TERHADAP KEBIJAKAN HUTANG DAN FREE CASH FLOW

2018 ◽  
Vol 1 (2) ◽  
pp. 1-14
Author(s):  
Tumpal Manik
Keyword(s):  
Cash Flow ◽  
Capital Expenditure ◽  
Market Value ◽  
Free Cash Flow ◽  
Share Price ◽  
Price Ratio ◽  
Investment Opportunity ◽  
Book Value ◽  
Investment Opportunity Set ◽  
Equity Ratio

Penelitian ini bertujuan untuk menganalisis faktor-faktor yang mempengaruhi investment opportunity set terhadap kebijakan hutang dan free cash flow pada perusahaan manufaktur yang terdaftar di Bursa Efek Indonesia tahun 2016 – 2017. Pengambilan sampel dilakukan dengan metode purposive sampling. Jumlah populasi 168 yang memenuhi kriteria sebanyak 40 perusahaan, maka data penelitian 40 x 2 tahun yaitu 80 data. Pengolahan data penelitian untuk menguji hipotesis penelitian secara simultan dan parsial. Hasil penelitian bahawa faktor-faktor yang mempengaruhi investment opportunity set terhadap kebijakan hutang berpengaruh singnifikan, antara lain proksi ios berdasarkan Market to Book Value of Assets Ratio sebesar 16,1%, Market to Book Value Equity Ratio sebesar 18,2%, Earning per Share Price Ratio (sebesar 19,1%, Capital Expenditure to Book Value Asset Ratio sebesar 17,6%, Capital Expenditure to Market Value of Assets Ratio sebesar 15%. Sedangkan investment opportunity set terhadap free cash flow berpengaruh signifikan

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