The influence of liquidity, profitability, asset structure, and business risk on capital structure: evidence from indonesia's retail trading sector

Authors

  • Rifa Mahdiah Sekolah Tinggi Ilmu Ekonomi Indonesia Jakarta, Jakarta, Indonesia
  • Irvan Noormansyah Sekolah Tinggi Ilmu Ekonomi Indonesia Jakarta, Jakarta, Indonesia

DOI:

https://doi.org/10.36406/jastei.v8i1.49

Keywords:

Capital Structure, Liquidity, Profitability, Asset Structure, Business Risk

Abstract

Purpose: This study aims to examine the influence of liquidity, profitability, asset structure, and business risk on the capital structure of retail trading sub-sector companies listed on the Indonesia Stock Exchange for the 2016–2019 period.

Methods: This research adopts a quantitative approach with a causal research strategy. The population consists of retail trading sub-sector companies listed on the Indonesia Stock Exchange from 2016 to 2019. The sample was determined using the purposive sampling method, resulting in 20 companies with a total of 80 observations. Secondary data was collected from the official website (www.idx.co.id). Data analysis was conducted using EViews 9 software.

Findings: The results indicate that (1) liquidity has a positive effect on capital structure, (2) profitability does not affect capital structure, (3) asset structure does not affect capital structure, and (4) business risk does not affect capital structure.

Practical Implications: These findings provide insights for financial managers and investors in the retail trading sector regarding the determinants of capital structure, emphasizing the role of liquidity while indicating that profitability, asset structure, and business risk may not significantly influence financing decisions.

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Published

2025-02-21

Issue

Vol. 8 No. 1 (2025)

Section

Articles

License

Copyright (c) 2025 Rifa Mahdiah, Irvan Noormansyah

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This work is licensed under a Creative Commons Attribution 4.0 International License.

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