The Effect of Profitability, Liquidity, and Asset Structure on Capital Structure with Firm Size as Moderating Variable

Dewi, Cicilia Ratna; Fachrurrozie, Fachrurrozie

doi:10.15294/aaj.v10i1.44516

Cited by 20 publications

(25 citation statements)

References 14 publications

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“…With the existence of reduced short-term debt, it can result in a decrease in the proportion of the capital structure. In addition, there are similar results from several studies, namely Septiani and Suaryana (2018), Dewi and Fachrurrozie (2021) and Gunadhi and Putra (2019). H4: Liquidity has a negative effect on Capital Structure…”

Section: Effect Of Liquidity On Capital Structuresupporting

confidence: 83%

The Effect of Profitability, Asset Structure, Business Risk, and Liquidity on Capital Structure in Health Sector Companies Listed on the Indonesia Stock Exchange

Arindhita¹,

Sutrisno²

2022

IJEBMR

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The purpose of this study was to determine the effect of profitability, asset structure, business risk, and liquidity on the company's capital structure with the control variable of company size to homogenize the sample. The population in this study is the health sector companies listed on the Indonesia Stock Exchange during the 2016-2020 period. The sampling method used purposive sampling technique. Based on the criteria in the selection of samples, one of which is a company that has complete financial statements in the 2016-2020 period, it was found that a number of 14 health companies will be used as samples in this study. The data analysis technique used is panel data regression analysis, using the eviews application. The results showed that profitability had a positive effect on capital structure, then asset structure and liquidity had a negative effect on capital structure. Meanwhile, business risk has no significant effect on capital structure.

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Section: Effect Of Liquidity On Capital Structuresupporting

confidence: 83%

The Effect of Profitability, Asset Structure, Business Risk, and Liquidity on Capital Structure in Health Sector Companies Listed on the Indonesia Stock Exchange

Arindhita¹,

Sutrisno²

2022

IJEBMR

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“…In addition, it is feared that companies with high debt will not be able to pay their debts according to the specified time and it will be more difficult for companies to earn high profits. This statement is in accordance with the results of research conducted byDewi & Fachrurrozie (2021), where leverage has a negative effect on earnings quality.On the other hand, research conducted byWati and Putra (2017) shows that leverage has no effect on earnings quality. In the research it was said that although the level of leverage and company risk is high, it does not mean that the company's earnings quality are not good because the company can still improve the quality of its earnings even though it has a high debt to asset ratio (DAR) if the company can manage debt efficiently, and has more conservative inventory and credit sales management.Based on the argument above, the research hypothesis can be formulated as follows: H1: Leverage affects earnings quality.…”

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confidence: 92%

Using Efficient Contracting Theory to Find Out the Companies’earnings Quality

Herman¹,

Soenarno²

2022

Vallis Aurea

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Profit is one of the information from financial statements that is still considered by investors or creditors. Therefore, accounting profits that have good quality are important information for potential investors and creditors in making the right decisions. Management has an information regarding the condition of the company and is likely to change or exaggerate the existing information, so efficient contract requests for financial accounting information is coming from lenders and shareholders. This study aims to examine the effect of leverage, outstanding shares, and good corporate governance on the earnings quality of manufacturing companies listed on the Indonesia Stock Exchange (IDX) during 2020. Leverage is measured by Debt to Asset Ratio (DAR), outstanding shares is measured by Cummulative Abnormal Return (CAR), good corporate governance is measured by the 1st level of ASEAN Corporate Governance Scorecard (ACGS), and earnings quality is measured by earnings quality ratio. The number of samples in this study were 104 companies that was taken by purposive sampling technique, tested using the multiple linear analysis method, and processed using SPSS Statistics 25 software. The results of this study show that outstanding shares have a positive effect on earnings quality, while leverage and good corporate governance have no effect on earnings quality.

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“…Balios et al (2016) also found that the relation between asset structure and leverage of the company is negative. Similarly, the asset structure was found as the factor negatively affecting the capital structure in the paper of Dewi and Fachrurrozie (2021). The opposite results were reported by Kenourgios et al (2020), who found tangible assets structure ratio negatively impacting the level of leverage.…”

Section: Literature Reviewmentioning

confidence: 77%

The Impact of Asset Structure on a Company’s Financial Results Stability

Zimny

2022

JoFFL

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The purpose of the article is to examine the impact of asset structure on the stability of financial results of companies. The article verifies two hypotheses: 1. high share of non-current assets in total assets results in high volatility of profitability over time. 2. high share of PPE (Property, Plant & Equipment) in total assets results in high volatility of profitability over time. The methodology of the study includes a literature review and empirical research based on correlation analysis. The research covered the aggregated data of Polish non-financial enterprises employing 10 persons or more keeping accounting ledgers, data for years 2009–2020 (first dataset) and annual financial data of 115 companies from 13 WSE industry sub-sectors for years 2009–2021 (second dataset). The results of the research. The analysis of the asset structure and the volatility of profitability in the research sample indicated industries with large and small values of these parameters. Then, the hypotheses were tested; the results for the second dataset showed that there is a positive and weak, but statistically significant (p value ≤ 0.005) correlation between non-current asset structure ratio and both, ROS and ROS adjusted ratios, and there is a weak, but negative correlation between PPE structure ratio and ROS and ROS adjusted ratios (with p value of 0.021 and 0.076, respectively). On this basis, hypothesis 1 was considered as verified positively, and hypothesis 2 was rejected. The discussion contains suppositions concerning the probable reasons of the discrepancy between the result for the hypotheses 1 and 2.

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The Effect of Profitability, Liquidity, and Asset Structure on Capital Structure with Firm Size as Moderating Variable

Cited by 20 publications

References 14 publications

The Effect of Profitability, Asset Structure, Business Risk, and Liquidity on Capital Structure in Health Sector Companies Listed on the Indonesia Stock Exchange

The Effect of Profitability, Asset Structure, Business Risk, and Liquidity on Capital Structure in Health Sector Companies Listed on the Indonesia Stock Exchange

Using Efficient Contracting Theory to Find Out the Companies’earnings Quality

The Impact of Asset Structure on a Company’s Financial Results Stability

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