The Effect of Free Cash Flow and Leverage on Earnings Quality: The Effect of Free Cash Flow and Leverage on Earnings Quality

Gede Sedana Wibawa Yasa (Politeknik Negeri Bali)
Ni Putu Rita Sintadevi (Politeknik Negeri Bali)

JURNAL PENELITIAN EKONOMI DAN AKUNTANSI (JPENSI)
Vol 8 No 1 (2023): JURNAL PENELITIAN EKONOMI DAN AKUNTANSI (JPENSI)

This study aims to examine the relationship between free cash flow and leverage on earnings quality, this research is a type of quantitative research using secondary data from the Indonesian stock exchange, based on the criteria obtained from 41 banking companies that meet the aspects as a research sample. Based on the results of multiple regression analysis, it was found that free cash flow had a significant positive effect on earnings quality in banking sector companies listed on the IDX. This study also shows that leverage has a negative and significant effect on earnings quality in banking sector companies listed on the IDX.