THE INFLUENCE OF COMPANY SIZE, FINANCIAL LEVERAGE, LIQUIDITY RATIO, AND INCOME BEFORE TAX TOWARDS THE SELECTION OF INVENTORY COST FLOW ASSUMPTIONS IN RETAIL COMPANIES LISTED IN IDX PERIOD 2012-2014

Abstract

The purpose of this research is to analyze factors which can influence in retail company to decide accounting methods used to price inventories. Factors in this research represented as independent variables which are company size, financial leverage, liquidity ratio, and income before tax. While accounting methods to price inventory in other word inventory cost flow assumptions represented as dependent variable which is selection of inventory cost flow assumptions. The population of this research is retail company listed in Indonesia Stock Exchange. This research period observation is 2012 – 2014. The sample of this research is selected using purposive non-random sampling. The final sample consists of 16 companies with 3 years observation period. Logistic regression used in this research in order to test the hypothesis. The result of this research shows that company size, financial leverage, liquidity ratio, and income before tax insignificantly statistical influence toward inventory cost flow assumptions.