Effects of Free Cash Flow, Current Ratio, ROA, and DER on Dividend Policy: Evidence from Indonesian Food and Beverage Companies
DOI:
https://doi.org/10.24905/icobis.v2i1.68Keywords:
Dividend Policy, Free Cash Flow, Current Ratio, Return on Assets, Debt to Equity RatioAbstract
Dividend policy signals a firm’s financial health and shapes investor interest, yet not all listed firms pay dividends consistently. This study examines the effects of free cash flow, current ratio, return on assets (ROA), and debt to equity ratio (DER) on the dividend policy of food and beverage subsector companies listed on the Indonesia Stock Exchange (IDX) during 2019–2023. From a population of 57 companies, 21 were selected through purposive sampling based on predetermined criteria. Quantitative secondary data were obtained from annual financial statements and analyzed using descriptive statistics, classical assumption tests, multiple linear regression, the t-test, the F-test, and the coefficient of determination (R²) in SPSS 22. The results show that free cash flow and the current ratio have a positive effect on dividend policy, ROA has no effect, and DER has a negative effect. Simultaneously, the four variables significantly affect dividend policy. These findings suggest that cash availability and liquidity support dividend payments, whereas leverage constrains them.
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