The Regression Effect of Capital Structure and Firm Growth on the Firm value

Abstract

This study aims to determine and analyze the effects of capital structure, firm growth, and profitability on the firm value on the IDX. The population in this study were all manufacturing companies in the consumer goods industry sector, as many as 42 firms, and the number of samples was as many as 12 firms using the purposive sampling method. This study uses secondary data derived from the annual financial statements of manufacturing companies listed on the IDX. The data were analyzed using SPSS program. The results of this study indicate that capital structure and profitability have a negative and insignificant effect on the firm value on the IDX. The firm's growth has a positive and negligible impact on the firm value on the IDX. Trade Off Theory explains that if the position of the capital structure is below the optimal point, any additional debt will increase the firm's value. On the other hand, if the position of the capital structure is above the optimal threshold, any additional debt will reduce the firm's value. Statistically, the capital structure has a negative and insignificant effect on the firm value in the consumer goods industry sector listed on the IDX.

Revealing the Capital Structure Factor Is Dominated by Debt to Lq45 Companies on the Indonesia Stock Exchange

“…It is in line with the results of research (Linawati et al, 2022) showing that profitability proxied by ROI has a negative and significant effect on capital structure. This research is in line with the opinion of (Amin, 2021), which explains that the impact of profitability with ROI and ROE proxies on capital structure is found to be negative and significant. The incompatibility of the results of this study with the results of previous studies, which have a negative effect, is due to the increase in the ability to generate profits from the total investment made is not sufficient to increase the availability of own capital in the capital structure, so it must raise funds from loans or debt.…”

“…It is in line with the results of research (Linawati et al, 2022), which shows that profitability proxied by ROI has a negative and significant effect on capital structure. This research is in line with the opinion of (Amin, 2021), which explains that the impact of profitability with ROI and ROE proxies on capital structure is negative and significant.…”

Sustainability Environmental Performance Future Investment for Company Value

“…Regression evaluation is a statistical technique employed to quantify the impact of an independent variable on a dependent variable within a research context (Amin, 2021;Huapea, 2021). Regression analysis is used to estimate the size of the variable of interest from data on variables that are autonomous that are previously known to be substantial.…”

Pengaruh Struktur Modal, Profitabilitas, Ukuran Perusahaan dan Pertumbuhan Perusahaan terhadap Nilai Perusahaan

“…Profitability mencerminkan keunggulan perusahaan dalam menghasilkan laba yang sehubungan dengan total asset, penjualan, dan ekuitas sendiri dalam periode tertentu (Amin, 2021). Perusahaan dengan kondisi financial stabil dapat menentukan besaran harga saham yang ditawarkan (Antoro et al, 2020).…”