THE EFFECT OF CASH HOLDING, DIVIDEND PAYOUT RATIO AND FINANCIAL LEVERAGE ON INCOME SMOOTHING PRACTICES

Abstract

This study aims to analyze the effect of Cash Holding, Dividend Payout Ratio, and Financial Leverage on Income Smoothing practices in energy sector companies listed on the Indonesia Stock Exchange during the 2022–2024 period. Income Smoothing is measured using the Eckel Index, and the data is analyzed using panel data regression with the Random Effect Model approach. The results indicate that the Dividend Payout Ratio has a negative and significant effect on Income Smoothing. Meanwhile, Cash Holding and Financial Leverage show no significant effect. The adjusted R-squared low value suggests that the three independent variables explain only a small portion of the variation in Income Smoothing, indicating the need to consider other influencing factors in future research.