Analysis of Effect of Profitability, Assets Structure, Size of Companies, and Liquidity to Capital Structures in Mining Companies Listed in Indonesia Stock Exchange Period 2012 - 2015

Abstract

ABSTRACT

Impact of Activity Ratio, Profitability, Liquidity, and Asset Structure on Capital Structure in Food and Beverages Companies Listed On Indonesia Stock Exchange Period 2015-2019

“…Research that examines the impact of liquidity on capital structure shows a positive effect to capital structure (Arlita, 2019). On the other hand, other studies have shown that liquidity has a significant effect to capital structure (Arilyn, 2020;Salim & Susilowati, 2019;Ahmad et al, 2017). Based on these findings, the fourth hypothesis proposed are: 115 H4: Liquidity effect capital structure in significant relationship.…”

“…Other research results were put forward by Salim & Susilowati in 2019 which stated that profitability, liquidity, assets growth and firm size simultaneously affect the capital structure. Ahmad et al (2017) proves that profitability, asset structure, firm size and liquidity have a simultaneous effect capital structure. Vu et al, 2020 examined the influence of the board size, the board independence, and especially different ownership structures, which include the managerial ownership, the state ownership, the concentrated ownership, and the foreign ownership of the capital structure in Vietnam.…”

“…The method of calculating the profitability ratio that used in this study is the Return on Assets (ROA). Previous research has given a result to prove that profitability has a negative impact on capital structure (Arilyn, 2020;Ahmad et al, 2017;Salim & Susilowati, 2019). However, Arlita's research (2019) found that profitability had no partial effect on structure capital.…”

“…Additional loan capital can come from internal and external funds and be used to strengthen the company's capital structure. Financial managers need to know the factors that affect the strengthening of the capital structure, that is including activity, profitability, liquidity, asset structure, asset 113 growth, firm size, growth opportunity, institutional ownership, and asset structure (Salim & Susilowati, 2019;Arlita & Surjandari, 2019;Ahmad et al, 2017).…”

The Determinant of Capital Structure in Mining and Metal Company

“…The measurement of earnings could be seen through the ratio of Return on Assets (ROA), which was the ability of companies to earn profits with the level of sales of total assets owned and own capital. In this research, the Capital structure is calculated by comparing the total company debt with total equity held by the company and measured using the Debt to Equity Ratio (DER) ratio [3].…”