Title:
FINANCIAL FLEXIBILITY, BANKRUPTCY RISK AND CAPITAL STRUCTURTURE

Authors:
Sutrisno and Abdul Sitah, Indonesia

Abstract:

Industry in the infrastructure sector contributes to the development of a region and country. The funding needs for investment in this sector are very large, but the ability of the Indonesian government to fund infrastructure development using public funds from countries is very limited. This research was conducted to determine the determinants of capital structure in infrastructure sector companies in Indonesia. The sample companies in this study are infrastructure, utility and transportation sector companies listed on the IDX. Data used in the form of financial ratios from sample companies during the period 2013-2017. The analytical method used is multiple regression with the dependent variable being the capital structure; while financial flexibility, bankruptcy risk, growth opportunity, and asset structure act as independent variables. The results of analysis show that the variable bankruptcy risk, growth opportunity significantly influences the capital structure. While financial flexibility and asset structure variables do not affect the capital structure. This study is expected to be useful for company management especially as input and consideration in determining decisions on the capital structure of a company.