Effect of Net Profit Margin, Debt to Equity Ratio, Current ratio and Inflation on Dividend Payout Ratio

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2Departement of Management, Universitas Nasional, Indonesia

Abstract: This study aims to determine the effect of Net Profit Margin (NPM), Debt to Equity Ratio (DER), Current Ratio (CR) and Inflation on Dividend Payout Ratio (DPR). The object of this research is companies listed on the LQ45 index on the Indonesia Stock Exchange.

The research design used is causal research. Sampling using purposive sampling method. From this method obtained 12 companies that meet the criteria and as many as 48 companies during the observation period. The analysis used in this research is panel data regression analysis using three alternative model approaches, namely the common effect, fixed effect and random effect, then using the chow model selection test and the hausmant test. Regression model testing is done by statistical tests, namely Model F Testing and Model-t Testing

Keywords: Net Profit Margin, Debt To Equity Ratio , Current Ratio, Inflasi, and Dividend Payout Ratio

I. INTRODUCTION

The company's performance will be recorded in a financial report which is usually included once every 3 months or quarterly as well as an annual financial report or what is called an Annual Report. For corporate investors who book profits will reflect a positive operational activity. It is very important to know whether a company is recording a profit or not. In general, investors who invest or invest in a company's stock certainly want a return, both in terms of capital gains or dividends with high returns and low risk. Some shareholders or investors prefer the income they expect from a dividend distribution than the income generated from capital gains (Brigham and Houston, 2010).

Dividends are a portion of the net profit earned by an issuer or company and therefore dividends will be distributed to shareholders if they earn a profit. This shared advantage is the advantage that has fulfilled all of its permanent obligations, namely interest and tax expenses. The dividends that will be distributed later to the shareholders are the net profits that the company will get, so that these profits will affect the amount of the dividend payout ratio. According to Nyi Raden Sella Ayu Ardiyanti (2015). Dividend Payout Ratio, which is the percentage of profit distributed in the form of cash dividends. The size of the Dividend Payout Ratio will affect the investment decisions of shareholders and also affect the financial condition of a company.

The dividend policy of a company will certainly not be separated from the factors that influence it, such as company profitability, liquidity ratios, solvency and macroeconomics of the country.