Determinants of Capital Structure: Evidence From Indonesian Palm Oil Companies

Abstract

This study to find out the determinants of capital structure in the palm oil industry in Indonesia. The variables are commodity prices, total assets, tangible assets, profitability, asset turnover, liquidity, inventory turnover, interest rates, and capital structure as independent variables. The data processing uses SPSS version 25 and performs classical assumption test, coefficient of determination test, and multiple regression analysis. The object of this study is oil palm plantation companies listed in Indonesian stock exchange (IDX) period 2016 to 2019. The results show that CPO prices, total assets, tangible assets, profitability, and interest rates have no effect on capital structure. Meanwhile, asset turnover has a positive effect on capital structure. Current ratio has a negative effect on the capital structure. Inventory turnover has a negative effect on the capital structure of oil palm plantation companies. This research is useful for companies engaged in the palm oil industry in determining policies.

Unveiling the Changing Capital Structure Dynamics in the Oil and Gas Industry: Evidence from Pakistan

“…LQTY negatively and significantly affects capital structure (Nurwulandari, 2021). The study's findings demonstrated that PFTY, LQTY, and AS had negative and notable effects on capital structure (Dewi et al, 2021). Doan (2019) reported that foreign ownership, AS, PFTY, and LQTY all have unfavorable relationships with capital structure.…”

“…PFTY has a detrimental impact on FL (Sutomo et al, 2020). Return on assets, an indicator of PFTY, is inversely connected (Dewi et al, 2021). Sayılgan et al (2006) concluded that, for Turkish enterprises' capital structure decisions, PFTY is negatively connected to FL.…”

What Causes Future Gold Price Volatility in Indonesia?

“…The influence of macroeconomic indicators, such as the Consumer Price Index, Industrial Production Index, Money Supply, Stock Market Index, Exchange Rate, Consumer Confidence Index, and Composite Economic Leading Indicator, on the future volatility of commodities (Mo, et al, 2018). Additionally, commodity prices are frequently suspected as a reference for businesses involved with these commodities (Dewi, et al, 2021a).…”