Sample Selection Data Collection Methods

579 Moreover, last year stock price data to calculate market values are obtained from subscribe Metastock which belongs to PT Finansial Bisnis Informasi and www.yahoo.comfinance . The classifications of manufacturing firms are based on Indonesian Capital Market Directory ICMD 2007. Table 3.1 Sample Selection Procedure Keterangan Jumlah Manufacturing firms listed in ISE on 2007 142 Sample selection criterias : Has not been listed in ISE since 2000 until 2007 18 Not using Rupiahs as financial reporting currency 6 Year end period other than December 31 1 Incomplete available datas 1 Firms that do not fulfill the sample selection criterias 26 Total Research Samples 116

4. Analysis

4.1 Descriptive Statistics

Descriptive statistics of variables used is presented in Table 4.1. Based on Table 4.1, the average of log abnormal value of selling, general, and administrative expense ABNSGA is 0,0703; the average of abnormal value of production cost ABNProdCost is 0,1523; and the average of abnormal value of gain on asset sales ABN GAIN is 0,0130. This may indicate that in average public manufacturing firms in Indonesia are doing real activities manipulation through the three indicators SGA, ProdCost, and GAIN. In addition, sample firms, have positive OIROA and CFROA. Our samples in average consist of profitable firms. The average value of asset total in million of whole samples is Rp 1,864,146.22 by the maximum value of Rp 39,145,102 and minimum value of Rp 33,434. This indicates that samples varies from small firms and big firms. Moreover, sample firms have book-to-market ratio average for -1,1330. These indicates that in average, sample firms on year 2002-2004 do not have high growth opportunity. 580 Table 4.1 Descriptive Statistics Mean Median Std. Deviation Minimum Maximum OIROAt+1 0.0682 0.0673 0.1418 -0.6737 1.2865 OIROAt+2 0.0705 0.0659 0.1411 -0.6737 1.2865 OIROAt+3 0.0732 0.0694 0.1375 -0.6620 1.2865 CFROAt+1 0.0705 0.0673 0.1378 -0.6315 1.2865 CFROAt+2 0.0556 0.0540 0.1166 -0.6315 0.4701 CFROAt+3 0.0532 0.0528 0.1195 -0.6315 0.4701 ABNSGA 0.0703 0.0472 0.0850 0.0000 0.6258 ABNProdCost 0.1523 0.0873 0.1745 0.0001 1.1236 ABNGAIN 0.0130 0.0085 0.0248 0.0000 0.2234 TOTALASSET 1,864,146.2 2 534,249.5 4,031,570.1 7 33,434 39,145,102 BTM -1.1330 0.9679 13.9074 - 162.9636 22.3334 OIROA 0.0591 0.0586 0.1330 -0.6786 0.5566 OIROAt+1 and CFROAt+1 = operating performance in one year later, OIROAt+2 and CFROAt+2 = operating performance on two years later, OIROAt+3 and CFROAt+3 = operating performance in three years later, ABNSGA = log abnormal value of selling, general, and administrative, ABNProdCost = abnormal value of production cost, ABNGAIN = abnormal value of gain on asset sales, TOTALASSET = total asset in millions, BTM = firm‘s opportunity to grow, OIROA = operating performance in this period. The value of real activities manipulation above can be identified into two patterns, which is income-increasing pattern and income-decreasing pattern. Income-increasing pattern is indicated by negative log abnormal value of selling, general, and administrative expense and positive abnormal value of production cost and gain on asset sales. If vice-versa, then income- decreasing pattern occurs. Descriptive statistics of the three real activities manipulation variables which classified based on manipulation pattern done can be seen on Table 4.2 below.