Abstract: The capital structure is a comparison between long-term debt and equity. The capital structure in a company generally consists of two components, such as foreign capital and own capital. To find out what can affect the capital structure, several factors need to be considered, such as profitability, business risk, sales growth, and company size. This study aims to determine the effect of profitability, business risk, sales growth, and company size on the capital structure of the food and beverage sub-sector manufacturing companies listed on the IDX for the 2017-2019 period. This research was conducted on the IDX using a sample of 17 companies obtained based on purposive sampling method and the data were analyzed using multiple linear regression analysis techniques. Based on the analysis, it was found that profitability and firm size had no effect on capital structure, while business risk and sales growth had an effect on the capital structure of the food and beverage sub-sector manufacturing companies listed on the IDX.
Keywords: Profitability, Business Risk, Sales Growth, Company Size, Capital Structure.
Title: The Effect of Profitability, Business Risk, Sales Growth, and Company Size on Capital Structure
Author: Muhammad Fakhri Ardiana, I Gde Kajeng Baskara
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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