Influence of Asset Structure, Firm Size, Profitability and Business Risk on Capital Structure in Companies Listed on the IDX

Samsul, Kartika; Fatimah, Fatimah; Ladewi, Yuhanis

doi:10.47747/ijfr.v3i2.745

Cited by 2 publications

(4 citation statements)

References 6 publications

(12 reference statements)

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“…The result however did not support Afinindy, Salim, and Ratnawati [5], but supported the study result of Kartika, Fatimah, and Ladewi [6] which showed a significant relationship between firm size and profitability on long term debt.…”

Section: Resultscontrasting

confidence: 72%

“…Although profitability has an impact on business value, it has no effect on capital structure. Kartika, Fatimah, and Ladewi [6] ascertained capital structure in businesses traded on the Indonesian Stock Exchange (IDX) is impacted by company size and profitability. Employees in the building, real estate, and property industries are the subject of the study.…”

Section: Empirical Reviewmentioning

confidence: 99%

“…The expense of repaying business loans entails risk. The corporation will be exposed to more danger the more costs it must bear [6].…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Effect of Firm Size and Profitability on Long Term Debt of Firms Listed at the Nairobi Securities Exchange, Kenya

Pyoko

2024

AJPAS

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Organization expenses result from a company’s utilization of long-term debt in its capital structure. One can also characterize a firm’s size by looking at its assets. In order for a company to draw in investors, its worth increases with its size. The profitability of a business may be enhanced by including long-term obligations in its structure of capital since the interest paid on such debts is deduction for taxes. Therefore, this study aimed at examining the effect of firm size and profitability on long term debt of listed firms at the Nairobi Securities Exchange. The study was based on trade off theory and pecking order theory. Secondary data was obtained from the firms from 2007-2011. Panel data was used to analyze data observations. The result indicates that firm size had insignificant effect on long term debt of firms. Profitability had significant effect long term debt. The study recommends that larger firms should leverage their greater access to capital markets to secure long term debts financing at favorable terms, balancing the benefits of debt against potential risks. Firms also with high profitability should encourage internal financing sources to reduce reliance on external debt and minimize financial cost.

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Section: Resultscontrasting

confidence: 72%

Section: Empirical Reviewmentioning

confidence: 99%

See 1 more Smart Citation

Effect of Firm Size and Profitability on Long Term Debt of Firms Listed at the Nairobi Securities Exchange, Kenya

Pyoko

2024

AJPAS

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“…Maka (H4) yang menyatakan jika risiko bisnis membawa pengaruh negatif pada struktur modal ditolak atau terbukti. Temuan penelitian ini searah dengan penelitian yang Suadnyana & Wiagustini (2013), Andika & Fitria (2016), Sari (2016), Mustofa & Lestari (2021), dan Kartika et al, (2022) laksanakan yang mengungkapkan ditemukannya keterkaitan positif antara risiko bisnis dan struktur modal.…”

Section: Tabel 8 Hasil Uji F (Uji Simultan)unclassified

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Kusumawijaya,

Diantini

2024

EJMUNUD

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The balance of debt and capital in an organization or business is mainly represented by the capital structure. The objective of this research endeavour is to analyse the correlation between capital structure and various factors that impact Indonesian firms operating in the telecommunications subsector, including asset structure, firm size, sales growth, business risk, and free cash flow. Quantitative techniques were used for this study. Purposive sampling was utilized to choose 15 organizations with 75 observation units, and secondary data was gathered from the financial records of those 15 businesses operating in the telecommunications subsector between 2017 and 2021. The data was examined through multiple linear regression analysis. The findings of this study indicate that sales growth does not affect capital structure. Conversely, asset structure exhibits a negative impact on capital structure, while firm size, business risk, and free cash flow have positive effects on capital structure. These findings indicate the significance of comprehending the factors that impact capital structure and the pertinent theories. This understanding can offer valuable insights to companies, helping them make informed decisions and avoid irrational choices that may impact the company or external stakeholders, such as investors. Keywords: Asset Structure; Business Risk; Capital Structure; Company Size; Sales Growth.

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Influence of Asset Structure, Firm Size, Profitability and Business Risk on Capital Structure in Companies Listed on the IDX

Cited by 2 publications

References 6 publications

Effect of Firm Size and Profitability on Long Term Debt of Firms Listed at the Nairobi Securities Exchange, Kenya

Effect of Firm Size and Profitability on Long Term Debt of Firms Listed at the Nairobi Securities Exchange, Kenya

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