Overview

Original Research

DOES PROFITABILITY, ASSET STRUCTURE, AND BUSINESS RISK CAN AFFECT CAPITAL STRUCTURE?

IQLIMA AZHAR 1, and RIZKA 2.

Vol 17, No 08 ( 2022 )   |  DOI: 10.5281/zenodo.7018934   |   Author Affiliation: Samudra University, Aceh-Indonesia 1; Serambi Mekkah University, Aceh-Indonesia 2.   |   Licensing: CC 4.0   |   Pg no: 1617-1626   |   To cite: IQLIMA AZHAR, and RIZKA. (2022). DOES PROFITABILITY, ASSET STRUCTURE, AND BUSINESS RISK CAN AFFECT CAPITAL STRUCTURE?. 17(08), 1617–1626. https://doi.org/10.5281/zenodo.7018934   |   Published on: 23-08-2022

Abstract

Research Purpose: This study empirically investigates the impact of Profitability, Asset Structure, and Business Risk on the Capital Structure of food and beverage companies listed on the Indonesia Stock Exchange. Methodology: This research used population were all food and beverage companies listed on the Indonesia Stock Exchange, as many as 21 companies. The sampling method used in this study is the purposive sampling method, namely determining the sample based on specific criteria or considerations so that a sample of 10 companies is obtained during the 2013-2018 period. The data analysis method used in this study is the classical assumption test and multiple linear regression analysis. Research Finding: The results showed that partially Profitability and Asset Structure variables had a positive and significant effect on Capital Structure. In contrast, Business Risk negatively and significantly affects Capital Structure. Simultaneously shows that the variables Profitability, Asset Structure, and Business Risk significantly affect Capital Structure.

Keywords

Profitability, Asset Structure, Business Risk, Capital Structure