Does Capital Structure Impact Financial Performance? (Banking Enterprise in ASEAN 2017- 2021)

Abstract

This study intends to investigate how capital structure affects the financial health of ASEAN banking organizations. Demands for improving banking performance must always be carried out so that their survival can be maintained properly. A company's financial performance is influenced by various factors, and capital structure is one of them. The sample used in this study is the ranking of the top 10 banking companies with the largest assets in ASEAN in 2021 during the 2017-2021 period. The dependent variable in this study is financial performance which is proxied by ROA, ROE, and Tobin's Q. Leverage, DER, and collateralizable assets are used as proxies for the independent variable, capital structure. The method used in this research is panel data regression analysis. The results of this study are that there is a negative effect of leverage on ROA, DER has no effect on ROA, CA has a positive effect on ROA, Leverage has a positive effect on ROE, DER has a negative effect on ROE, CA has a positive effect on ROE, leverage has a positive effect on Tobin's q, DER and CA has no effect on Tobin's q.