BAB I

The establishment of a company certainly has a definite goal, namely to increase the value of
the company and maximize the profit or profit desired by the company through increasing the
prosperity of the owners or shareholders. The prosperity of the owners or shareholders is reflected in
the share price in the capital market. The higher the stock price means the owner's welfare is
increasing. In this way, the company is able to maintain its sustainability and will always develop in
financial management, the company's target is not only to get high profits. In running its business,
companies that go public are managed by separating the ownership function from the management or
managerial function. (Putri, N. dan Septiawan. 2021)

The separation of these functions forms an agency relationship, namely a relationship where
the owner of the company (principal) entrusts the management of the company to be carried out by
another person or manager (agent) in accordance with the interests of the owner (principal), by
delegating some decision-making authority to the agent. On the other hand, the separation of
company ownership from management can result in a situation where management acts for their own
interests such as making decisions to finance the company by implementing a policy of increasing debt.
Therefore, debt policy is sensitive to a conflict of interest between managers and shareholders, the
conflict is called an agency dispute. (Rahmawati. 2012.)

Agency theory provides an understanding of the needs of management in the company and
the needs of investors in the company are not the same. This happens because managers are
concerned with personal needs. The costs incurred by the manager result in an increase in company
costs, thereby reducing company profits and reducing dividends. However, in determining the debt
policy of a company, it is influenced by several factors including dividend policy, liquidity, profitability,
and company size (Sudana, I. M. 2021).

Agency theory describes the agency relationship as a relationship that arises because of a
contract established between shareholders who use agents to carry out services that are in the
interests of shareholders. Agency problems are caused by conflicts of interest and information
asymmetry between shareholders and management. Management has a goal to get the maximum
bonus or incentive for the work that has been achieved, while shareholders want to maximize their
welfare by getting a high return on their investment (Putrianti and Suhartono, 2018).

Managerial ownership is the shareholder of the management who actively participates in

making company decisions (Hanafi, M. 2004). Managerial ownership is seen as an appropriate control
mechanism to reduce agency conflicts that cause high agency costs ( Hartono, J. 2013). Managerial
ownership is the shareholders which also means in this case as owners in the company from the
management who actively participate in decision making in a company concerned.

Institutional ownership is company shares owned by institutions or institutions such as

insurance companies, banks, investment companies and other institutional ownership ( Nazir, M. 2013).
Institutional ownership has a very important role in minimizing agency conflicts that occur between
managers and shareholders. Institutional ownership is ownership of company shares owned by
institutions or institutions such as insurance companies, banks, investment companies and other
institutional ownership. Institutional ownership is measured using the indicator of the percentage of
share ownership owned by the institution from the total outstanding share capital ( Sriyanto. 2021).
 Debt policy is a policy taken by the management in order to obtain financing for the company,
so that it can be used to finance the company's operational activities. Debt policy is proxied into the
DER (Debt to Equity Ratio) formula which reflects the ratio between total debt and total equity. The
lower the DER value means the company's debt level is also low. ( Afzal, A. dan Abdul, R. 2012)

If the DER value is higher, this means that the company's obligations are greater and the
portion of the use of debt in financing investments in assets is greater. The greater the debt, the
greater the net income available to shareholders, including dividends to be distributed and the
company's financial risk will increase. This is because the company is obliged to pay debts first before
distributing dividends. (Agnes, S. 2015)

Debt policy is a policy taken by the management in order to obtain financing for the company,
so that it can be used to finance the company's operational activities. Debt policy is proxied into the
DER (Debt to Equity Ratio) formula which reflects the ratio between total debt and total equity. The
lower the DER value means the company's debt level is also low. ( n, A. Z. dan Aziz, I. 2017)

If the DER value is higher, this means that the company's obligations are greater and the
portion of the use of debt in financing investments in assets is greater. The greater the debt, the
greater the net income available to shareholders, including dividends to be distributed and the
company's financial risk will increase. This is because the company is obliged to pay debts first before
distributing dividends. (Haryetti, E. 2012)

Debt policy is an important decision that greatly influences the condition of a company. And
the debt policy will determine the value of the company if the management of a company can manage
debt properly and is able to maintain the existence of the company itself. Debt policy as the main
decision making for the company (Herninta, 2019).

Dividend policy is a decision on how large a percentage of the company's income is given to
investors. The greater the dividends distributed to shareholders, the better the performance of the
issuer or company, and companies that have good performance are considered profitable and the
value of the company will be better, so that creditors will use them to give trust to companies to
provide credit (Anggraini and Wihandaru, 2015).

Liquidity is a measure of the company's ability to pay short-term maturing debts (liabilities), or
a ratio to determine the company's ability to finance and fulfill obligations (debts) when they are billed.
A liquid company means it has large funds to pay all its obligations. The more liquid the company, the
company has internal funds to meet its operational needs. Then the company will choose to use
internal funds rather than using external funds or debt (Kasmir, 2018).

Profitability is a ratio to assess the company's ability to seek profit. This ratio also provides a
measure of the effectiveness of a company's management. This is indicated by the profit generated
from sales and investment income (Kasmir, 2018). So, profitability is a tool to measure the ability and
success of a company in generating profits obtained through sales and investment during a certain
period by using the sources owned by the company.

Company size is something that is used to decide debt policy. Companies with large sizes have
a better chance of being recognized by the public than companies with small sizes (Wahidahwati, 2002
in Syadeli 2013). The size of large companies has the advantage of activity and is better known to the
public compared to small companies.

In addition to dividend policy, liquidity, profitability, and company size that can affect debt
policy, there is still one more factor that can affect all factors, namely financial performance because
financial performance speaks of how companies manage their finances efficiently in their use (Riny,
2018).
 Therefore, the larger the size of the company, the more transparent the company discloses the
company's performance to outsiders, thus the company is easier to get loans ( Ari, Y. R. 2018).

Kebijakan Hutang (DER)

1 2017 2018 2019 2020 2021
LPSIP 19,9727 20,06442 20,72488 17,6222 16,50209
UNSP -4595,94 -1031,44 -254,227 -208,068 -219,855
SGRO 104,7783 123,8566 127,9709 156,7054 112,1384

Kebijakan Deviden (DPR)

2 2017 2018 2019 2020 2021
LPSIP 1,879 1,29579 0.040863121 0.006880589
-0.02583758
UNSP 1616 1616 1616 1616 1616
SGRO 0,636968674 1,783512287 8,08232 0,000218933 5,63339E-05
Likuiditas (CR)
3 2017 2018 2019 2020 2021
LPSIP 5,209302884 0,004352229 0,069733734 4,891541947 6,184387185
UNSP 0,141400162 0,112567692 0,10643355 0,060137529 0,113420903
SGRO 1,2024237 0,918548125 0,415705256 0,730084894 1,092045969
Profitabilitas (ROA)
4 2017 2018 2019 2020 2021
LPSIP 0,783367 0,03282 0,024706 0,063673 0,083574
UNSP -0,11508 -0,11073 -0,58253 -0,12594 0,014229
SGRO 0,029857 0,007053 0,004225 -0,01968 0,083549
Ukuran Perusahaan
5 2017 2018 2019 2020 2021
LPSIP 16,0922 16,12182 16,14038 16,20636 16,28794
UNSP 16,45804 16,40804 15,94373 15,84051 15,92675
SGRO 22,84722 22,92258 16,06332 16,09223 16,09292
Kinerja Keuangan (NPM)
6 2017 2018 2019 2020 2021
LPSIP 1,611099 0,08195 0,068289 0,196648 0,21886
UNSP -1,03366 -0,94727 -2,46628 -0,38062 0,029591
SGRO 0,069053 0,019833 0,012238 -0,05475 0,000156

Source: (Data Processed 2022)

At the London Sumatra Indonesia Tbk (LPSIP) company, it is known that the value of the debt
policy (DER) fluctuated in the period 2017 to 2021, where in 2017 the value of the debt policy was
19.9727, in 2018 to 2019 the policy value was debt (DER) has increased, namely in 2018 the DER
value was 20,06442 and in 2019 the DER value reached 20.72488. However, it decreased again in
2020 until 2021, which only reached 16,50209. This shows that there is a problem at PT. London
Sumatra Indonesia Tbk (LSIP) which has decreased, this means that PT. London Sumatra Indonesia Tbk
(LSIP) is unable to pay its debts Debt policy (DER) can be a problem because the number of assets that
do not grow can make it difficult for companies to apply for loans.

Dividend policy (DPR) at PT. London Sumatra Indonesia Tbk (LSIP) has not been doing well for
the last 5 years. Dividend policy (DPR) at PT. London Sumatra Indonesia Tbk (LSIP) has fluctuated until
2021, it decreased from the previous year. This shows that the level of liquidity at the company
London Sumatra Indonesia Tbk (LSIP) is in a bad condition so that the dividends (profits) distributed to
shareholders are low.

At the Bakrie Sumatera Plantations Tbk (UNSP) company, it is known that the profitability
(ROA) value fluctuated up and down from 2017 to 2021. In 2017 the ROA value was obtained at -
0.11508, in 2018 the ROA value decreased by -0.11073, in 2019 the ROA value increased by -
0.58253, but the ROA value decreased in 2020 by -0.12594 and in 2021 the ROA value only reached
0.014229. This shows that the company generates a low level of profit so that the amount of net profit
generated from each rupiah of funds embedded in total assets is also low.

The financial performance (NPM) of the London Sumatra Indonesia Tbk (LSIP) company has
shown problems for the past 5 years. The debt policy of the London Sumatra Indonesia Tbk (LSIP)
company which has decreased, this has made the London Sumatra Indonesia Tbk (LSIP) company quite
capable of paying its debts but making its financial performance decline. Financial performance (NPM)
which will be considered by investors to invest in the company.

At the Sampoerna Agro, Tbk (SGRO) company, the debt policy value (DER) at the Sampoerna
Agro, Tbk (SGRO) company has not been running well for the last 5 years. In 2017 the DER value
reached 104.7783, the DER value in 2018 at the Sampoerna Agro, Tbk (SGRO) company increased by
123.8566, the DER value continued to increase in 2019 by 127.9709 and in 2020 the DER value
continued to increase. increased by 156.7054, but in 2021 the DER value again decreased by
112.1384. This shows that the company Sampoerna Agro, Tbk (SGRO) is unable to pay its debts but
makes its financial performance decline.

Company size at Sampoerna Agro, Tbk (SGRO) shows that the value of company size
fluctuates. In 2017 the value of company size reached 22,84722 and the value of company size
increased in 2018 by 22,92258. However, in 2019 the value of company size decreased by 16,06332
and in 2019 the value of company size increased by 16,09223 and decreased again by 16,09292 in
2021. This shows that the company is experiencing problems, causing the company not to able to
meet all obligations and provide an adequate rate of return for investors.

Net Profit Margin (NPM) at the company Sampoerna Agro, Tbk (SGRO) fluctuated where in
2017 the NPM value was 0.069053 and increased in 2018 by 0.019833. However, the NPM value
decreased in the period 2019 to 2021, where in 2019 the NPM value decreased by 0.012238, in 2020
the NPM value decreased again by -0.05475 and in 2021 the NPM value only reached 0.000156. This
shows that the company's performance has decreased which has caused investor confidence in the
company Sampoerna Agro, Tbk (SGRO) to decrease.

From the table above, it can also be concluded that the debt policy of Oil Palm Plantation
Companies uses debt more than their capital, this can also interfere with the company's financial
performance, the proportion of debt to a certain level will have a positive impact on value of the
company, but after a certain proportion of debt it has a negative impact, this indicates that when the
proportion of company debt is getting bigger, the burden and risk of the company will be higher.

CHAPTER II

MATERIALS AND METHODS

 Types of research

The type of research method used in this study is True Experimental Research, where this
method is a research method carried out to investigate whether there is a causal relationship and how
big the causal relationship is by giving certain treatments to several experimental group as well as
providing control treatment as a comparison (Nazir, 2013). The research approach used is quantitative.
Quantitative research methods are one type of research whose specifications are systematic, planned
and clearly structured from the beginning to the making of the research design (Sugiyono, 2018).

Research Location and Research Time

The location of this research was carried out on oil palm plantation companies listed on the
Indonesia Stock Exchange in 2017-2021 through the website www.idx.co.id. And the research time
starts from August 2022.

Data Types and Sources

The type of data in this study is to use secondary data with panel data that has the
characteristics of several objects and in several time periods. Sources of data in this study were
obtained from books, journals, the internet, references to previous research relevant to this research
and information on the official website of the Indonesia Stock Exchange, namely www.idx.co.id in the
form of financial statements of palm oil companies for the year 2017-2021. which has been published

Population and Sample

The research population is a group of people, objects or things that are the source of sampling,
a group that meets certain conditions related to the research problem (Sugiyono, 2018). The
population in this study were all oil palm plantation companies listed on the Indonesia Stock Exchange
as many as 24 companies. While the sample in this study used a non-probability sampling technique
which became a sample of 15 companies and became 75 samples of observations on Oil Palm
Plantation Companies listed on the Indonesia Stock Exchange.

Method of collecting data

In collecting data in this study, the source of the document data is in the form of annual
reports and notes on the financial statements of palm oil plantation companies listed on the Indonesia
Stock Exchange, especially in financial reports such as Dividend Policy, Liquidity, Profitability,
Company Size, Debt Policy, and Financial Performance. 2017-2021 years.

Data analysis

The data analysis tool used to manage the data in this study is the Eviews application program.
The data analysis method used is descriptive statistical test, panel data analysis, panel data regression
estimation model test, and hypothesis testing.