RELEVANCE OF FINANCIAL RATIOS TO DETERMINE THE DIVIDEND YIELD IN MANUFACTURING COMPANY LISTED ON INDONESIA STOCK EXCHANGE 2005 - 2009

Abstract

This study aims to determine the effect of financial ratios information to predict the
Dividend Yield. The financial ratios are projected into five independent variables, namely
Net Profit Margin (NPM), Return On Equity (ROE), Return On Asset (ROA), Return On
investment (ROI), and Debt to Equity (DER), and one dependent variable, namely
Dividend Yield (DY).
The population in this research are all of manufacturing companies that listed on
Indonesia Stock Exchange in 2009 as many as 139 companies. By using the purposive
judgement sampling, it was determined there are 25 companies that are used as research
samples. All data used in this research are secondary data that obtained from the
Indonesia Stock Exchange's official website. The data analysis tool in this research is a
linier regression because the independent and dependent variable in this research is in
percentage ratios variable. The data analysis techniques in this research include
descriptive statistical tests, classical test assumption and the linier regression test both
simultaneously or separately.
From the analysis of hypothesis testing simultaneously, it can be concluded that all
independent variables in this research have significant effect against Dividend yield in
manufacturing companies that listed on Indonesia Stock Exchange (2005 – 2009) with a
significant level sig= 0,012. From the analysis of hypothesis testing separately, it can be
concluded that only two variables that have a significant effect against Dividend Yield,
those are Net Profit Margin (NPM) and Return On equity (NPM) with a significant level
sig= 0,029 and sig=0,038, so those variables are reliable in predicting the level of
investment gains (Dividend Yield).