The Impact of Financial Performance Analysis On Earnings Management In Manufacture Companies

This study aims to examine the effect of financial performance using : the ratio of leverage, the ratio of profitability, and the ratio of firm size on earnings management. Discretionary Accrual is used as the proxy of Earnings Management. The data used in this study are secondary data, which are manufacture companies are listed on the Indonesia Stock Exchange (IDX). The samplesusedin this studyare 10 manufacture companies which are listed in Indonesia Stock Exchange in the years of 2016 until 2020 in which selected by using the purposive sampling technique. The measurement of Earnings Management in this research has been carried by using modified Jones Model Discretionary Accrual. The analytical method of this study uses multiple linear regression.The result of this research describes that the leverage variable have any significant influence to the earnings management, since the size of the debt affects earnings management actions. The amount of debt will increase the risk of failure for the company, so management uses earnings management to reduce company failure. The profitability variable does not have any influence to the earnings management. Therefore, when the profitability of the company decrease, the practice of earnings management is tend to occur. And, the firm size variable has not influence to the earnings management. This problem occurs because large companies tend to do less earnings management activity than small companies. Keywords: Leverage, Profitability, Firm Size, And Earnings Managemen