Leverage Capability in Controlling Free Cash Flow to Improve Financial Performance
- 10.2991/ebic-17.2018.29How to use a DOI?
- Leverage, Free Cash Flow, Financial Performance
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.
- © 2018, the Authors. Published by Atlantis Press.
- Open Access
- This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).
Cite this article
TY - CONF AU - Nila Tristiarini AU - Ririh Dian Pratiwi PY - 2018/01 DA - 2018/01 TI - Leverage Capability in Controlling Free Cash Flow to Improve Financial Performance BT - Proceedings of the 1st Economics and Business International Conference 2017 (EBIC 2017) PB - Atlantis Press SP - 184 EP - 188 SN - 2352-5428 UR - https://doi.org/10.2991/ebic-17.2018.29 DO - 10.2991/ebic-17.2018.29 ID - Tristiarini2018/01 ER -