The Effect of Profitability and Liquidity on Capital Structure in Manufacturing Sub-Sector Companies in 2019-2022

Abstract

The purpose of this study was to examine and analyze the effect of profitability and liquidity on the capital structure of manufacturing sub-sector companies listed on the Indonesia Stock Exchange in 2019-2022. The research population is all manufacturing sub-sector companies listed on the IDX for the period 2019 – 2022, namely 53 companies. The sampling method in this study used purposive sampling so that a sample of 40 companies was obtained. Data analysis in this study used multiple regression using the SPSS statistical program version 24. The results showed that profitability had a significant effect with a negative relationship to capital structure in manufacturing sub-sector companies listed on the Indonesia Stock Exchange in 2019-2022. Then liquidity was found to have a significant effect with a negative relationship to the capital structure of manufacturing sub-sector companies listed on the Indonesia Stock Exchange in 2019-2022. Finally it was found that simultaneously profitability and liquidity had a significant effect on the capital structure of manufacturing sub-sector companies listed on the Indonesia Stock Exchange in 2019-2022