Year: 2023 | Month: December | Volume: 10 | Issue: 12 | Pages: 487-498
DOI: https://doi.org/10.52403/ijrr.20231253
The Effect of Profitability, Liquidity, Asset Structure, and Sales Growth on Capital Structure with Firm Size as a Moderating Variable in Automotive Sub-Sector Companies and Their Components Listed on Indonesia Stock Exchange
Jeffry1, Rina Br Bukit2, Narumondang Bulan Siregar3
1,2,3Department of Accounting, Faculty of Economics and Business Universitas Sumatera Utara, Indonesia
Corresponding Author: Jeffry
ABSTRACT
The research aims to determine the effect of profitability, liquidity, asset structure and sales growth on capital structure and whether firm size can moderate the effects of profitability, liquidity, asset structure and sales growth on capital structure in automotive and components sub-sector companies listed on the Indonesia Stock Exchange.
The research population is all automotive and components sub-sector companies listed on Indonesia Stock Exchange, namely 13 companies. The research samples are taken using purposive sampling technique, and 12 companies are selected over 5 periods, from 2018 – 2022. The research employs Moderated Regression Analysis (MRA) method with the aid of EViews 10 software.
The research results indicate that liquidity is the only variable which has a positive and significant effect on capital structure. Meanwhile, profitability has no effect on capital structure, asset structure has no effect on capital structure, and sales growth has no effect on capital structure. Company size can moderate the correlation between liquidity and capital structure, but it cannot moderate the correlation between profitability and capital structure. In addition, company size cannot moderate the correlation between asset structure and capital structure, and it cannot moderate the correlation between sales growth and capital structure.
Keywords: profitability, liquidity, asset structure, sales growth, capital structure, firm size
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