Year: 2018
Type: conference-paper
Abstract: Free Cash Flow, in general, being a problem for the company if it is not good in controlling.The manager can use free cash flow for actions that can harm the company.Leverage is a cost that can control the usage of free cash flow for the company's activity, which in turn can improve financial performance.The purpose of this study is to examine the role of leverage in mediating the relationship between free cash flow and financial performance.The research variable consists of Free Cash Flow as the independent variable, the Leverage as the mediator and Financial Performance as the dependent variable.The population of this research is manufacturing companies listed on the Indonesia Stock Exchange periods 2011-2015.The sampling method is purposive sampling with criteria, and the samples that meet the criterion are 70 manufacturing companies.The research model is used Warp PLS 3.0.The results show that free cash flow has an effect on financial performance, and Leverage mediates the relationships between free cash flow and financial performance.This research contribute a novelty of science in the field of management accounting, and has positive implications for companies in determining control strategies of free cash flow through the leverage could improve the financial performance.
Authors: Nila Tristiarini, Ririh Dian Pratiwi
Institution: Universitas Dian Nuswantoro
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W2793483401