KARAKTERISTIK PERUSAHAAN, FINANCIAL DISTRESS, DAN KEPUTUSAN HEDGING: STUDI PADA PERUSAHAAN MANUFAKTUR DI INDONESIA

Abstract

Hedging is method or technique to minimize risks arising from price fluctuations. This study aims to determine the factors that affect the company’s hedging decisions. This study uses firm size, growth opportunity, leverage, liquidity, profitability, financial distress as independent variables and hedging as the dependent variable. This study uses a quantitative approach and the data used is in the form of secondary data. The object used in this study is manufacturing companies on Indonesia Stock Exchange in 2013-2017. The sample of this study was 99 companies. The analysis technique used is logistic regression analysis. The results of this study indicate that firm size measured using the natural logaritma of total assets and profitability that is proxied by return on assets has a positive effect on the company’s hedging decisions. Liquidity proxied by the current ratio has a negative effect on the company’s hedging decisions. Growth opportunity calculated by using a comparison between market value of equity and book value of equity, leverage that is proxied by the debt to assets ratio and financial distress calculated using the Altman z-score formula does not effect the company’s hedging decisions. The implication of this study is that companies with large size, low liquidity or high profitability should do hedging activities to protect the company from adverse risks.

Keyword: foreign exchange risk; hedging; risk management.