a. Operating Return on Assets
Operating return on assets = Where;
Operating income
it
= operating income of stock i at period t Total asset
it
= total asset of stock i at period t
b. Operating Cash Flow to Total Assets
Operating Cash Flow to Total Assets = Where;
Operating cash flow
it
= operating cash flow of stock i at period t Total asset
it
= Total asset of stock i at period t
c. Sales Growth
Sales growth
=
Where; S
it
= net sales i at period t S
it-1
= net sales i at period t-1
d. Total Assets Turnover
Total asset turnover
=
Where; Net Sales
it
= net sales of stock i at period t Total Asset
it
= total asset of stock i at period t
3.5 Data Analysis Methods
3.5.1 Data Normality Test
Data normality test is used to test whether the data that will be examined have normal distribution or not. If the data are normally distributed, the research
hypotheses tests will use one-sample t-test and paired amples t-test. But if the data are not normally distributed, the hypotheses tests will use one-sample Wilcoxon
test and paired samples Wilcoxon test. The steps to calculate by the Shapiro-Wilk tests are as follows:
a. Formulate Hypotheses
H : the data are normally distributed
H
a
: the data are not normally distributed b.
Determine level of significance α The significance levels used in this study are 1, 5, and 10.
c. Testing Criteria
H will be accepted if p-value α
H will be rejected if p-value α
d. Draw Conclusion.
If p-value α, the distribution of data is normal. If p-value α, the distribution of data is not normal.
3.5.2 Hypotheses Tests
The test of hypotheses are organized as follows. a.
Abnormal Return Test 1
One Sample T-test and One Sample Wilcoxon Test One sample T-test is used when the distribution of the data is normal, while
one sample Wilcoxon Test is used when the distribution of the data is not normal. The steps for the test are as follows:
a Formulate Hypotheses
H
01
: AR
it
= 0, there is no abnormal return on IPO date H
a1
: AR
it
≠ 0, there is abnormal return on IPO date.
b Determine Level of Significance
The significance level used in this study is 1, 5, and 10. c
Testing Criteria Hypothesis test is using one tailed test. The criteria are:
H will be accepted if p-value α
H will be rejected if p-value α
d Draw Conclusion
If p-value α, there is no abnormal return on IPO date. If p-value α, there is abnormal return on IPO date.
2 Paired Samples Wilcoxon Test and Paired samples T-test.
Paired samples T-test is used when the distribution of the data is normal, while paired samples Wilcoxon Test is used when the distribution of the
data is not normal. The steps to test as follows: a
Formulate Hypotheses H
02
: The operating return on assets after going public is lower or equal than before going public.
Ha
2
: The operating return on assets after going public is higher than before going public.
H
03
: The operating cash flow to total assets after going public is lower or equal than before going public.
Ha
3
: The operating cash flow to total assets after going public is higher than before going public.
H
04
: Sales Growth after going public is lower or equal than before going public.
Ha
4
: Sales Growth after going public is higher than before going public. H
05
: Total assets turnover after going public is lower or equal than before going public.
Ha
5
: Total asset turnover after going public is higher than before going public.
b Determine Level of Significance
The significance level used in this study is 5 α=5. c
Testing Criteria Hypothesis test is using one tailed test. The criteria are:
H will be accepted if p-value α
H will be rejected if p-value α
d Draw Conclusion
1 If p-value α, The operating return on assets, the operating cash flow
to total assets, sales growth, and total assets turnover after going public is lower or equal than before going public.
2 If p-value α, the operating return on assets, the operating cash flow
to total assets, sales growth, and total assets turnover after going public is higher than before going public.
3.6 Framework for Problem Solving
