Effect of Working Capital Management and Earnings Management on Stock Return of Digital Bank Companies Listed on the Indonesia Stock Exchange

Ari Purwanti

doi:10.54783/influencejournal.v4i2.194

Authors

Ari Purwanti Universitas Dian Nusantara, Indonesia

DOI:

https://doi.org/10.54783/influencejournal.v4i2.194

Abstract

This study aims to determine the effect of working capital and earnings management on the stock returns of digital bank companies listed on the Indonesia Stock Exchange. This research uses quantitative research with a case study approach. The research variables are divided into the dependent variable (working capital management and company profit management) and the independent variable (stock returns). The working capital management variable uses the Cash Conversion Cycle (CCC) proxy, while the company's Earnings Management variable uses the Efficient Earning Management (EEM) proxy. Analysis of research data using the SPSS 19.0 for windows program and several analytical techniques, namely normality test, coefficient of determination (R²), F statistical test, and t statistical test. Based on the results and data analysis in this study, it can be concluded that digital bank stock returns are not influenced by the company's working capital management but are positively and significantly influenced by its earnings management.

References

Agustia, D., Muhammad, N. P. A., & Permatasari, Y. (2020). Earnings Management, Business Strategy, and Bankruptcy Risk: Evidence from Indonesia. Heliyon, 6(2), e03317.

Boisjoly, R. P., Conine Jr, T. E., & McDonald IV, M. B. (2020). Working Capital Management: Financial and Valuation Impacts. Journal of Business Research, 108, 1-8.

Cai, Y., Kim, Y., Li, S., & Pan, C. (2019). Tone at the Top: CEOs’ Religious Beliefs and Earnings Management. Journal of Banking & Finance, 106, 195-213.

Chambers, N., & Cifter, A. (2022). Working Capital Management and Firm Performance in the Hospitality and Tourism Industry. International Journal of Hospitality Management, 102, 103144.

Dhole, S., Mishra, S., & Pal, A. M. (2019). Efficient Working Capital Management, Financial Constraints, and Firm Value: A Text-Based Analysis. Pacific-Basin Finance Journal, 58, 101212.

Digdowiseiso, K., Setiawan, H. D., Sugiyanto, E., & Suharyono, S. (2020). Does Leadership Matter in Managing the Village-Owned Enterprise?. Opción: Revista de Ciencias Humanas y Sociales, (93), 115-135.

Digdowiseiso, K., Sugiyanto, E., & Setiawan, H. D. (2020). Fiscal Decentralisation and Inequality in Indonesia. Экономика региона. 2020. Том 16, выпуск 3, 16(3), 989-1002.

Ding, R., Li, J., & Wu, Z. (2018). Government Affiliation, Real Earnings Management, and Firm Performance: The Case of Privately Held Firms. Journal of Business Research, 83, 138-150.

Djalante, R., Lassa, J., Setiamarga, D., Sudjatma, A., Indrawan, M., Haryanto, B., ... & Warsilah, H. (2020). Review and Analysis of Current Responses to COVID-19 in Indonesia: January to March 2020. Progress in disaster science, 6, 100091.

Du, Q., & Shen, R. (2018). Peer Performance and Earnings Management. Journal of Banking & Finance, 89, 125-137.

Harakeh, M., El-Gammal, W., & Matar, G. (2019). Female Directors, Earnings Management, and CEO Incentive Compensation: UK Evidence. Research in International Business and Finance, 50, 153-170.

Kałdoński, M., Jewartowski, T., & Mizerka, J. (2020). Capital Market Pressure, Real Earnings Management, and Institutional Ownership Stability-Evidence from Poland. International Review of Financial Analysis, 71, 101315.

Lara, J. M. G., Osma, B. G., & Penalva, F. (2020). Conditional Conservatism and the Limits to Earnings Management. Journal of Accounting and Public Policy, 39(4), 106738.

Li, K., Kim, D. J., Lang, K. R., Kauffman, R. J., & Naldi, M. (2020). How Should We Understand the Digital Economy in Asia? Critical Assessment and Research Agenda. Electronic Commerce Research and Applications, 44, 101004.

Li, Y., Li, X., Xiang, E., & Djajadikerta, H. G. (2020). Financial Distress, Internal Control, and Earnings Management: Evidence from China. Journal of Contemporary Accounting & Economics, 16(3), 100210.

Pirttilä, M., Virolainen, V. M., Lind, L., & Kärri, T. (2020). Working Capital Management in the Russian Automotive Industry Supply Chain. International Journal of Production Economics, 221, 107474.

Prabowo, S. C. B., & Safitri, R. (2021). Analysis of Working Capital Management in Automotive Industry Sector Listed in Indonesia Stock Exchange. MEC-J (Management and Economics Journal), 5(1), 67-78.

Premti, A., & Smith, G. (2020). Earnings Management in the Pre-IPO Process: Biases and Predictors. Research in International Business and Finance, 52, 101120.

Sugiyanto, E., & Sitohang, C. A. (2017). Optimalisasi Fungsi Ruang Terbuka Hijau sebagai Ruang Publik di Taman Ayodia Kota Jakarta Selatan. Jurnal Sosial dan Humaniora, 2(1), 205-218.

Sugiyanto, E., Digdowiseiso, K., Waluyo, T., & Setiawan, H. D. (2018). The Effects of Specific Allocation Fund (DAK) on Local Economic Development: A Mixed-Method Analysis on Central Java Province, Indonesia. Journal of Applied Economic Sciences, 13(8 (62)), 1-9.

Trinugroho, I., Pamungkas, P., Wiwoho, J., Damayanti, S. M., & Pramono, T. (2021). Adoption of Digital Technologies for Micro and Small Business in Indonesia. Finance Research Letters, 102156.

Waluyo, T. (2020). Analisis Finansial Aplikasi Dosis dan Jenis Pupuk Organik Cair terhadap Produksi Tanaman Tomat (Lycopersicum esculentum Mill). Ilmu dan Budaya, 41(70).

Waluyo, T. (2020). Analisis Pendapatan dan Nilai Tambah Pengolahan Wine Salak di Desa Sibetan, Karangasem, Bali. Ilmu dan Budaya, 41(71).

Waluyo, T. (2020). Optimasi Pengkomposan Limbah Sayuran Pasar Minggu sebagai Sumber Pupuk Organik. Ilmu dan Budaya, 41(70).

Waluyo, T. (2020). Pemanfaatan Hormon Tumbuh Organik untuk Meningkatkan Prduktivitas Singkong Hasil Eksplorasi Seleksi Bibit Unggul. Ilmu dan Budaya, 41(70).

Waluyo, T. (2020). Pengaruh Citra Perusahaan dan Kualitas Pelayanan terhadap Kepuasan Pelanggan untuk Membangun Minat Berkunjung Kembali: Studi Pada Hotel X Kota Pekalongan. Ilmu dan Budaya, 41(71).

Waluyo, T. (2021). Margin Analysis and Marketing Efficiency of Dendrobium Orchid Plant. Psychology and Education Journal, 58(1), 194-209.

Waluyo, T. (2021). Penerapan Fungsi Manajemen dan Analisis Finansial Budidaya Bawang Putih (Studi Kasus Petani Bawang Putih di Desa Cipendawa, Pacet, Cianjur Jawa Barat). Ilmu dan Budaya, 41(72).

Waluyo, T., Digdowiseiso, K., & Sugiyanto, E. (2019). The Costs of Reduction Emission from Deforestation and Forest Degradation. Concepts and Issues. Journal of Environmental Management & Tourism, 10(1 (33)), 636-72.

Yulita, Y., Apriza, M., Wulandari, S., Isnaini, D., & Arisandy, Y. (2021). Management Level of Using Digital Services Bank Syariah Indonesia (BSI) KCP Ipuh. BIMA Journal (Business, Management, & Accounting Journal), 2(2), 200-211.

Yunita, P. (2021). The Digital Banking Profitability Challenges: Are They Different between Conventional and Islamic Banks?. Jurnal Akuntansi dan Keuangan Indonesia, 18(1), 4.

Zalata, A. M., Tauringana, V., & Tingbani, I. (2018). Audit Committee Financial Expertise, Gender, and Earnings Management: Does Gender of the Financial Expert Matter?. International Review of Financial Analysis, 55, 170-183.

Zams, B. M., Indrastuti, R., Pangersa, A. G., Hasniawati, N. A., Zahra, F. A., & Fauziah, I. A. (2020). Designing Central Bank Digital Currency for Indonesia: The Delphi–Analytic Network Process. Buletin Ekonomi Moneter dan Perbankan, 23(3), 413-440.