Analysis of Internal Company Factors and Managerial Ownership in Influencing the Financial Performance of Manufacturing Firms in Indonesia

Abstract

This study aims to analyze the effect of company size, capital structure, and accounting conservatism on financial performance in manufacturing companies listed on the Indonesia Stock Exchange (IDX) for the period 2021–2023, as well as to examine the role of managerial ownership as a moderating variable. The background of this study is based on fluctuations in financial performance, particularly Return on Assets (ROA), as well as inconsistencies in previous research findings regarding the determinants of financial performance. The independent variables in this study include company size, measured by log total assets, capital structure, proxied by Debt to Equity Ratio (DER), and accounting conservatism, measured by the market to book value ratio. The dependent variable is financial performance, proxied by ROA, while the moderating variable is managerial ownership, measured based on the percentage of shares owned by management. This study uses secondary data from the financial reports of BEI manufacturing companies for the period 2021–2023 with panel data regression analysis and Moderated Regression Analysis (MRA) techniques. This study is expected to provide empirical evidence on the influence of internal company factors on financial performance and the role of managerial ownership in strengthening or weakening this relationship. The results of this study are also expected to contribute to academics, companies, investors, and further research in understanding the dynamics of financial decision-making and corporate governance.

Keywords: Company Size, Capital Structure, Accounting Conservatism, Managerial Ownership, Financial Performance, Manufacturing Companies.