The effects of production and operational costs, capital structure and company growth on the profitability: Evidence from manufacturing industry

Muhammad Istan,Mochammad Fahlevi,Asep Dadan Suganda,Nazifah Husainah,Murniyanto Murniyanto,Indra Siswanti

doi:10.5267/j.ac.2021.4.025

Muhammad Istan, Mochammad Fahlevi + Show 4 more

Open Access

https://doi.org/10.5267/j.ac.2021.4.025

Copy DOI

Journal: Accounting	Publication Date: Jan 1, 2021
Citations: 1	License type: cc-by

Affiliation: Binus University, Mercu Buana University

Abstract

The purpose of this research is to analyze the effects of production and operational costs, capital structure and company growth on profitability. The method used in this research is quantitative method, data collection is performed by distributing questionnaires among employees of packaging industry. The population in this study are industrial employees in Jabodetabek whose numbers have not been identified with certainty. The questionnaire is distributed electronically using a simple random sampling technique. The results of the questionnaire returned are 180 respondents. Based on the results of data analysis, it is concluded that Capital structure has a significant effect on profitability. An increase in the capital structure variable will be followed by an increase in profitability and a decrease in variable capital structure will be followed by a decrease in profitability. Company growth has no significant effect on profitability. An increase in the company growth variable will not be followed by an increase in profitability and a decrease in variable company growth will not be followed by a decrease in profitability. Operational cost has a significant effect on profitability. An increase in the operational cost variable will be followed by an increase in profitability and a decrease in variable operational cost will be followed by a decrease in profitability. Production cost has no significant effect on profitability. An increase in the production cost variable will not be followed by an increase in profitability and a decrease in variable production cost will not be followed by a decrease in profitability.

Highlights

Manufacturing companies are companies whose activities are to process raw materials into finished goods that are ready for use by the community
An increase in the capital structure variable will be followed by an increase in profitability and a decrease in variable capital structure will be followed by a decrease in profitability
An increase in the company growth variable will not be followed by an increase in profitability and a decrease in variable company growth will not be followed by a decrease in profitability

Summary

Introduction

Manufacturing companies are companies whose activities are to process raw materials (raw materials) into finished goods that are ready for use by the community. Companies are required to be able to reduce production costs consisting of raw material costs, direct labor costs and factory overhead. According to Maryani (2020); Novitasari, (2021); Bakti and Kartika (2020); Suwandi and Hadi (2020), the level of profit is an important factor for the company. According to Asbari (2021); Bakti and Kartika (2020); Suwandi and Hadi, (2020), to run a business, companies need capital that comes from debt and equity (equity). This source of capital can be referred to as a source of financing or a source of funding or a source of capital. The company's accelerated growth may reflect the large need for funds if a company wishes to expand its business, thereby increasing the company's desire to retain profits

Objectives

Methods

Conclusion