Title:
Capital Structure and Its Determinants Study on Consumer Goods Sector Companies on the Indonesian Stock Exchange

Authors:
Dhea Suci Fauziyyah, Sutrisno, Indonesia

Abstract:

This study aims to examine the factors that influence the capital structure as measured by the debt to equity ratio. The factors that are thought to influence the capital structure are asset structure as measured by fixed assets to total assets, profitability measured by return on assets, business risk as measured by degree of operating leverage, company size and sales growth. The population in this study, namely companies in the consumer goods industry sector listed on the Indonesia Stock Exchange, took a sample of 30 companies using a purposive sampling technique, with an observation period of 3 years (2019-2021). Data were analyzed using panel data regression analysis. After testing the model, it was found that the fixed effect model was the best model. The results of the research using the fixed effect model showed that the asset structure and firm size had a positive and significant effect on capital structure. Profitability has a significant but negative effect on capital structure. Meanwhile, business risk and company growth have no effect on the capital structure.

DOI: http://dx.doi.org/10.51505/ijebmr.2022.6823