RESOURCE SELECTION DECISION AND THE AFFECTING FACTORS.

Amount: RESOURCE SELECTION DECISION AND THE AFFECTING FACTORS.

Authors: Utami Wahyu Lestari

Item Type: Thesis

Memberships: Master of Management Study Program, Faculty of Economics and Business Universitas Airlangga Surabaya, Indonesia

Publisher: Airlangga University

Abstract

This research is motivated by a company development life cycle, namely the introduction, growth, maturity and decline stages. One of the interesting cycles to observe is the growth stage of the company. In the growth cycle, the company experiences a market test, namely conditions that continue to increase in sales and an increasingly broad market share. As a result, the company's working capital increases and when it reaches full capacity, investment in fixed assets is required. Therefore the company needs a large source of funds to finance its growth. So how does the company finance its growth if the financing exceeds sustainable growth or the strength of the financial resources owned by the company at a certain time. The purpose of this study is to determine the decision to choose the source of funds for manufacturing companies when the company's actual sales growth exceeds sustainable growth and the factors that influence it. growth in manufacturing companies listed on the Jakarta Stock Exchange. In this study, there are three alternative decisions for selecting the source of funds, namely retained earnings, debt and shares. In addition, to determine the effect of actual sales growth factors, total asset turnover, leverage, and asymmetry information on the decision to choose sources of funds between internal and external sources of funds and between sources of debt and share funds in manufacturing companies that have actual sales growth exceeding sustainable growth. . The population of this study is all manufacturing companies listed on the Jakarta Stock Exchange in 1993-1996, while the target population is manufacturing companies that have actual sales growth exceeding sustainable growth, which is 37 companies. To find out the relationship between the decision to choose the source of funds with actual sales growth that exceeds sustainable growth, chi-square analysis is used with a significance level of (a) 5%. Furthermore, to determine the effect of actual sales growth factors, total asset turnover, leverage, and asymmetry information on the decision to choose sources of funds between internal and external sources of funds as well as between sources of debt and stock funds, logit analysis (logistic regression) is used with a significance level of (a) 5 %. The results showed that there was a significant relationship between the decision to choose the source of funds and actual sales growth exceeding sustainable growth in manufacturing companies listed on the Jakarta Stock Exchange. The contingency table shows that manufacturing companies tend to use external funding sources in the form of debt to meet their financing needs when the company experiences actual sales growth exceeding sustainable growth during the 1993-1996 period. Logit I analysis proves that there is a negative effect of the actual sales growth factor on the decision to choose the source of funds between internal and external sources of funds. This shows that the higher the actual sales growth, the company tends to choose to use external funding sources. Conversely, the lower the actual sales growth, the company tends to choose to use internal funding sources. While the logit 11 analysis proves that there is a positive influence of the total asset turnover factor and asymmetry information on the decision to choose the source of funds between debt and stock sources of funds in manufacturing companies that have actual sales growth exceeding sustainable growth. This shows that the higher the total asset turnover and asymmetry information the company tends to choose to use debt funds as sources.

Keywords: Financing Decision, Fund Resources, Actual Sales Growth, Sustainable Growth.

sources: http://repository.unair.ac.id/34787/