DETERMINANTS OF INCOME SMOOTHING PROFITABILITY SOLVABILITY FIRM SIZE AND DIVIDEND PAYOUT RATIO IN MANUFACTURING COMPANIES

Abstract

This quantitative study aims to examine the effect of profitability, solvency, firm size, and dividend payout ratio on income smoothing in primary consumer goods manufacturing companies listed on the Indonesia Stock Exchange during the 2022–2024 period. The research utilizes secondary data obtained from companies’ annual reports. The sample consists of 35 companies, resulting in 105 observations from firms within the primary consumer goods manufacturing sector listed on the Indonesia Stock Exchange between 2022 and 2024. The sampling method applied is purposive sampling. The data analysis techniques include descriptive statistics, multicollinearity testing, logistic regression analysis, coefficient of determination analysis, the Wald test (for partial hypothesis testing), and the omnibus test (for simultaneous hypothesis testing). The results of the Wald test indicate that profitability and firm size have a significant effect on income smoothing. In contrast, solvency and dividend payout ratio do not show a significant effect. This is supported by the significance values of profitability (0.016 < 0.05) and firm size (0.033 < 0.05), while solvency (0.082 > 0.05) and dividend payout ratio (0.778 > 0.05) exceed the threshold. Furthermore, the omnibus test results reveal a probability value of 0.001, which is below 0.05. This indicates that profitability, solvency, firm size, and dividend payout ratio simultaneously have a significant effect on income smoothing in primary consumer goods manufacturing companies listed on the Indonesia Stock Exchange for the 2022–2024 period.