Income Smoothing Analysis at Food and Beverages Companies Listed on the Indonesia Stock Exchange

Abstract

The purpose of this study is to examine the effect of Firm Size, company profitability, company operating leverage, and company investment status on income smoothing practices in companies that go public on the Indonesia Stock Exchange. The statistical method used is multiple linear regression with dummy variables. Based on the sampling criteria, the food and beverage companies that went public on the Indonesia Stock Exchange from 2013 to 2017, the samples of this study amounted to eight companies, and these companies have been statistically tested to practice income smoothing. Multiple linear regression analysis with dummy variables in this study was carried out 2 (two) times because, in the first test, the multiple linear regression model with the resulting dummy variables violated the classical assumption, namely autocorrelation. The results of multiple linear regression analysis with the second test dummy variable are only the firm size which affects income smoothing, while the profitability, operating leverage, and investment status has no effect on income smoothing