THE EFFECT OF RETURN ON ASSET, NON DEBT TAX SHIELD, ASSET GROWTH, COMPANY SIZE, AND CURRENT RATIO, AGAINST DEBT TO ASSET RATIO ON COMPANIES CONSUMER GOODS LISTED ON INDONESIA STOCK EXCHANGE FOR THE PERIOD (2011-2017)

Susi Artati

doi:10.38035/jafm.v1i2.20

Abstract

This research was conducted on Consumer Goods companies listed on the IDX (Indonesia Stock Exchange) for the period 2011 - 2017, aiming to examine the effect of Return on Assets (ROA), Non debt tax shield (NDTS), Asset Growth (GROWTH) Company Size (Size) , and Current Ratio (CR) simultaneously or partially to Debt to Asset Ratio (DAR). The sampling technique used was purposive sampling. The sample used in this study amounted to 26 companies, a total of 182 data. The data analysis technique in this research is multiple linear regression analysis, classic assumption test (normality, multicollinearity, heteroscedasticity, and autocorrelation), hypothesis testing, and the coefficient of determination. The software used for data processing is SPSS 22.0. The results of multiple linear regression analysis show the equation Ln_DAR = 2.119 - 0.041Ln_ROA + 0.091 Ln_NDTS + 0.0003 Ln_GROWTH - 0.030 Ln_SIZE - 0.565 Ln_CR + e with an F test of 103.468. The t-test value for the Return on Assets (ROA) variable is -2.529; the t-test value for the Non debt tax shield (NDTS) variable was 2,629; t test value for asset growth variable (GROWTH) is -0.014. t test value for variable firm size (Size) is -0.172; Current Ratio (CR) variable t test value of -21,437. The coefficient of determination (Adjusted R Square) is 0.739 or 73.9%, while the remaining 26.1% is influenced by other factors outside of this research model.

Highlights

Competition in the business world is getting tougher to make a company to increase company value
The results showed that the effect of profitability, asset structure, asset growth, company size, and liquidity together had a significant effect on capital structure
The results show that companies in Singapore and Thailand behave in accordance with the trade-off theory and pecking-order theory, while companies in Indonesia, the Philippines, and Thailand have a tendency to pecking-order theory in determining the company's capital structure

Summary

Introduction

Competition in the business world is getting tougher to make a company to increase company value. The existence of shareholders and their management is very important to determine the amount of profits that will be obtained later. In facing such conditions, every company is recommended or required to be able and smart to see and read the situation so that it can manage properly in order to be superior in competition. Companies need capital in carrying out their business activities which are used to finance the company's operational activities so that they can live and continue to grow from year to year. Short-term debt is often called current debt, which is an obligation that must be fulfilled in a period of less than one year or within the company's business cycle, while long-term debt is an obligation that must be fulfilled in a period of more than one year

Methods

Results

Conclusion