Osesoga, Maria Stefani and Pruska, Yohana (2022) Factors Affecting Firms’ Capital Structure: Evidence from Indonesia. International Journal of Multidisciplinary and Current Educational Research (IJMCER), 4 (5). ISSN : 2581-7027
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Abstract
The purpose of this research is to obtain empirical evidence about the effect of sales growth, total asset turnover, liquidity, and institutional ownership on capital structure. An optimal capital structure is able to create a company with strong and stable financial performance. Errors in determining the capital structure will have a significant impact on the company. The research object is manufacturing companies consecutively listed on Indonesia Stock Exchange (IDX) for the period 2018-2020. The sample in this research was selected using a purposive sampling method and the data used in this research were analyzed using the multiple regression method. The results were (1) sales growth has no negative effect on capital structure, (2) total asset turnover has a positive significant effect on capital structure, (3) liquidity has a negative significant effect on capital structure, (4) institutional ownership has a negative significant effect toward capital structure, and (5) sales growth, total asset turnover, liquidity, and institutional ownership simultaneously have a significant effect towards the capital structure. Taken together, management needs to pay attention to the liquidity of the company and encourages institutional parties to more contribute in the company’s funding policy.
| Item Type: | Article |
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| Keywords: | capital structure, current ratio, institutional ownership, sales growth, TATO |
| Subjects: | 300 Social Sciences > 330 Economics > 336 Public Finance |
| Sustainable Development Goals: | Goal 16. Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels Goal 08. Promote sustained, inclusive and sustainable economic growth, full and productive employment and work for all Goal 09. Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation |
| Divisions: | Faculty of Business > Accounting |
| Date Deposited: | 04 Nov 2022 03:12 |
| URI: | https://kc.umn.ac.id/id/eprint/23027 |
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