PENGARUH STRUKTUR MODAL TERHADAP PROFITABILITAS PADA PERUSAHAAN MANUAKTUR YANG TERDAFTAR DI BURSA EFEK INDONESIA (BEI)

Abstract

This research aimed to examine the effect of capital structure on the profitability of manufacturing Food and Beverage companies listed on the Indonesia Stock Exchange 2018-2020. The Independent variables were capital structure which was referred to as solvency ratio; Debt to Equity Ratio, Debt to Asset Ratio, and Current Asset Ratio. While dependent variable was profitability which was referred to as Return On Equity, with Sales Growth and Firm Size as controlling variables. The research was quantitative. Moreover, the data collection technique used purposive sampling. In line with that, there were 22 Food and Beverage companies as the sample. In total, there were 66 observation data. Furthermore, the data analysis technique used multiple linear regression with SPSS 26. The result concluded that DER had a negative and insignificant effect on ROE. It meant there was a different evaluation from the investors on how important debt was for the companies. However, DAR had a negative and significant effect on ROE; as they used external data in spending their current asset. As a consequence, the risk increased since the debts caused interest expense. In contrast, CR had no effect on ROE as the companies could maximize profitability by managing current assets in a good way.