Effect of Liquidity, Leverage, and Profitability on Consumption Company Hedging on Companies Listed on the Indonesia Stock Exchange from 2012-2018

Abstract

The regulation on currency hedging is applied to help investor protect their investment in the stock market against the possible decline of the rupiah. It is interesting also for investor to look at factor that can fact hedging decision. This research uses associative design with analysis in the consumption sector companies listed on the Indonesia Stock Exchange with the object of research was the hedging decision of 31 consumption sector companies consisting of 13 food and beverage companies, 4 cigarette companies, 7 pharmaceutical companies, 4 cosmetic & household goods companies, 3 home appliance companies for the period 2012-2018 with a total of 217 research samples. The method in this study uses a non-participant observation method with logistic regression analysis techniques using SPSS vs.21 software. The study states that liquidity, leverage, and profitability bring affects through hedging decision. Therefore, it is expected for decision maker in the company to make their hedging decision based on financial condition in the company such as liquidity, leverage, and profitability.