PENGARUH PROFITABILITAS DAN UKURAN PERUSAHAAN TERHADAP STRUKTUR MODAL

Abstract

This research aimed to examine the effect of profitability and firm size on capital structure. Since the quality of companies’ capital structure affected their financial performance, it became an essential matter for each company. Moreover, optimal capital structure is a kind of capital which is assumed to acquire the lowest weighted average capital that is expected to improve companies’ profit. The population was LQ-45 companies which were listed on Indonesia Stock Exchange during 2015-2019. Furthermore, the data collection technique used purposive sampling, in which the sample was based on criteria given. In line with, there were 39 companies at the sample. While the data was taken from Indonesia Stock Exchange Investment Gallery of STIESIA Surabaya and www.idx.co.id.Additionally, the data analysis technique used descriptive statistics, multiple linear regression, classical assumption test, proper model test (F-test), and hypothesis test (t-test). The research result concluded that profitability had a positive and significant effect on capital structure. On the other hand, firm size had an insignificant effect on capital structure of LQ-45 companies during 2015-2019.
Keywords: profitability, firm size, capital structure