Determinants Of Earnings Persistence In Manufacturing Companies: Evidence From The Food And Beverage Subsector Of The Jakarta Islamic Index

Abstract

This study investigates the determinants of earnings persistence in food and beverage manufacturing companies listed in the Jakarta Islamic Index. The analysis covers five firms over the 2019-2024 period, producing 30 firm-year observations. Secondary data were obtained from annual reports and evaluated using pooled multiple linear regression. To maintain consistency between the thesis appendices and the article, the firm-year ratios were re-estimated before the inferential analysis. The model is statistically significant (F = 32.51; p < 0.001) and explains 87.1% of the variation in earnings persistence, with an adjusted R-squared of 0.845. Cash-flow volatility, leverage, firm size, and sales-volatility proxies show positive and significant coefficients, whereas the proportion of independent commissioners used as the Good Corporate Governance proxy is not significant. Diagnostic tests indicate normally distributed residuals, no evidence of heteroskedasticity, and variance inflation factors below the conventional threshold. The findings suggest that operational cash generation, financing structure, scale, and sales activity are more closely associated with persistent earnings than the selected board-composition proxy. The results should be interpreted with attention to the small sample and the measurement of volatility variables.