Abstract
The purpose of this research is to prove the effect of profitability, company size, liquidity, and asset structure on the capital structure of manufacturing issuers in LQ45 in IDX in 2014- 2019. The study analyzed four free variables using secondary data in panel data with eight company cross-sections and a six-year time series. Analysis method used in the form of regression of panel data with random effect method. The results showed that profitability (ROE) has a positive and significant effect on the capital structure (DER), company size (SIZE) positively and significantly affect the capital structure (DER). , liquidity (CR) positively and significantly affect the capital structure (DER), asset structure (AS) positively but insignificantly affect the capital structure (DER) and profitability (ROE), company size (SIZE), liquidity (CR) and asset structure (AS) simultaneously influence the capital structure by 87.1496%, In comparison the remaining 12.8504% was explained by other independent variables that were not studied.
Highlights
IntroductionFinancial decisions are the main thing in making funding decisions
As a financial manager, financial decisions are the main thing in making funding decisions.These problems will encourage managers to increase productivity in order to maximize company profits
The results showed that profitability (ROE) has a positive and significant effect on the capital structure (DER), company size (SIZE) positively and significantly affect the capital structure (DER). , liquidity (CR) positively and significantly affect the capital structure (DER), asset structure (AS) positively but insignificantly affect the capital structure (DER) and profitability (ROE), company size (SIZE), liquidity (CR) and asset structure (AS) simultaneously influence the capital structure by 87.1496%, In comparison the remaining 12.8504% was explained by other independent variables that were not studied
Summary
Financial decisions are the main thing in making funding decisions. These problems will encourage managers to increase productivity in order to maximize company profits. This can be realized with a large investment from the company, so more funds are needed to increase the productivity and profits of the company. Profitability is a factor that affects the capital structure. A organisation has the capacity to generate income from a number things to do via many commercial enterprise insurance policies and selections inside a duration of time
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