Implications of The Effect Of Profitability and Liquidity on Capital Structure in Mining Companies in Indonesia With Firm Size as Moderation
DOI:
https://doi.org/10.30587/jurnalmanajerial.v12i01.8503Keywords:
Capital Structure, Profitability, Liquidity, Firm SizeAbstract
Background – Economic growth in Indonesia in 2022 reached 5.31%, which is the highest achievement from 2014. Although Indonesia was hit by the negative impact of the Covid-19 pandemic, the economy in Indonesia continues to show resilience and increasing rapidly. The ideal capital structure is a blend of debt and equity that maximizes firm value through prudent investment choices and enhances the financial and operational performance of the business.
Aim – This research is to determine the impact of internal factors on capital structure. By investigating the moderating effect of business size on the link between profitability and liquidity on capital structure, this study adds to the body of previous work.
Design / methodology / approach – This study employed a quantitative research design, which entails gathering quantifiable numerical data and applying statistical analysis to determine and elucidate the relationship between variables. The study employed secondary data, which was sourced from a company’s financial documents. Purposive sampling is used in the study to choose profitable companies. This approach is being employed since the data used in the study are secondary data, which offer more comprehensive and varied data information. Eviews was used to help with the data analysis strategy used in this investigation.
Findings – The hypothesis for the first hypothesis is profitability accepted to have a positive and significant effect on capital structure. Second hypothesis is accepted, and fourth hypothesis is accepted. While the third hypothesis is rejected.
Research implication – According to the research, a 1% improvement in profitability (ROA) can result in a 0.06% reduction in the company's debt, raising earnings and lowering the amount of debt in the capital structure. High liquidity companies typically use their internal profits instead of taking on debt or issuing additional shares. The study's findings imply that firm size may have an impact on the relationship between capital structure and liquidity because larger, more liquid corporations are thought to be more able to pay back their loans.
Limitations – The study acknowledged numerous limitations, including the use of USD exchange rates, which rendered some data meaningless, and the elimination of enterprises with unfavorable financial reports. Just 46 of the 63 profitable mining businesses listed on the IDX were examined in this study. Consequently, the study suggests that more research be done over a longer time period on various organizations or sectors. It also recommends that future research include more independent factors or mediating variables.
References
Ahmed Sheikh, N., & Wang, Z. (2011). Determinants of capital structure. Managerial Finance , 37(2), 117–133. https://doi.org/https://doi.org/10.1108/03074351111103668
Anggraeni, R. (2022). No Title. Ekonomi.Bisnis.Com.
Anjarwati, K., Chabachib, M., & Demi, I. R. (2015). Pengaruh Profitabilitas, Size, Dan Likuiditas Terhadap Nilai Perusahaan Manufaktur Di Indonesia Dengan Struktur Modal Sebagai Variabel Intervening. Diponegoro Journal of Finance.
Bhawa, I., & Dewi S., N. (2015). Pengaruh Ukuran Perusahaan, Likuiditas, Profitabilitas, Dan Risiko Bisnis Terhadap Struktur Modal Perusahaan Farmasi. E-Jurnal Manajemen Universitas Udayana.
Boateng, P. Y., Ahamed, B. I., Soku, M. G., Addo, S. O., & Tetteh, L. A. (2022). Influencing factors that determine capital structure decisions: A review from the past to present. Cogent Business and Management, 9(1). https://doi.org/https://doi.org/10.1080/23311975.2022.2152647
Bungin, B. (2010). Metodologi Penelitian Kuantitatif : Komunikasi, Ekonomi, dan Kebijakan Publik serta Ilmu-Ilmu Sosial Lainnya (1st ed.). Kencana.
Chandra, T. (2017). Faktor-Faktor Yang Mempengaruhi Struktur Modal Pada Perusahaan Properti Dan Real Estate Di Indonesia. EKUITAS (Jurnal Ekonomi Dan Keuangan), 18(4), 507.
Dayanty, A., & Setyowati, W. (2020). Pengaruh Kinerja Keuangan Dan Struktur Modal Terhadap Nilai Perusahaan Yang Dimoderasi Variabel Ukuran Perusahaan. Magisma: Jurnal Ilmiah Ekonomi Dan Bisnis, 8(2), 77–87. https://doi.org/https://doi.org/10.35829/magisma.v8i2.88
Deviani, M. Y., & Sudjarni, L. K. (2018). Pengaruh Tingkat Pertumbuhan, Struktur Aktiva, Profitabilitas , Dan Likuiditas, Terhadap Struktur Modal Perusahaan Pertambangan di BEI. E-Manajemen Unud, 7(3), 1222–1254.
Djashan, I. A. (2019). The Effect of Firm Size and Profitability on Firm Value with Capital Structure as Intervening Variables in Indonesia. Journal of International Business, Economics and Entrepreneurship.
Guna, M. A., & Sampurno, R. D. (2022). Analisis Faktor-Faktor Yang Mempengaruhi Struktur Modal (Studi Kasus Pada Perusahaan Makanan Dan Minuman Yang Terdaftar Di Bei Periode. Diponegoro Journal Of Management, 2(1), 1–13.
Hardanti, S., & Gunawan, B. (2010). Pengaruh Size, Likuiditas, Profitabilitas,Risiko, Dan Pertumbuhan Penjualan Terhadap Struktur Modal. Jurnal Akuntansi Dan Investasi, 11(2), 148–165. https://doi.org/https://journal.umy.ac.id/index.php/ai/article/view/1080
Hasani, Z., Purwidianti, W., Rahmawati, I. Y., & Bagis, F. (2023). Influence of Company Internal Factors and Macroeconomics on Capital Structure Moderated by Firm Size. Asian Journal of Economics, Business and Accounting, 23(24), 207–216. https://doi.org/10.9734/ajeba/2023/v23i241198
Heliani, & K Fadhillah, N. H. (2022). Effect of Asset Structure, Company Size, Liquidity, Profitability, and Sales Growth on Capital Structure. Jurnal Bisnisman : Riset Bisnis Dan Manajemen, 4(10, 80–92. https://doi.org/https://doi.org/10.52005/bisnisman.v4i1.120
Idode, P. E., Toyin, M. A., Akindele, J. O., & Oyekan, S. A. (2014). Influence of Capital Structure on Profitability: Empirical Evidence from Listed Nigerian Banks. IOSR Journal of Business and Management, 16(11).
Liang, J., Li, L. F., & Song, H.-S. (2014a). An explanation of capital structure of China ’ s listed property firms. Property Management , 32(1), 4–15. https://doi.org/https://doi.org/10.1108/PM-02-2013-0012
Liang, J., Li, L. F., & Song, H.-S. (2014b). An explanation of capital structure of China ’ s listed property firms. Property Management , 32(1), 4–15. https://doi.org/https://doi.org/10.1108/PM-02-2013-0012
Mahdaleta, E., Muda, I., & Nasir, G. M. (2016). Effect of Capital Structure, Company Size and Profitability on the Stock Price of Food and Beverage Companies Listed on the Indonesia Stock Exchange. Academic Journal of Economic Studies, 8(1), 23–29. https://doi.org/https://doi.org/10.22610/imbr.v8i1.1192
Margaretha, F., & Zai, M. P. (2013). Faktor‐Faktor Yang Mempengaruhi Kinerja Keuangan Perbankan Indonesia. Jurnal Bisnis Dan Akuntansi, 15(2), 133–141.
Meutia, T. (2016). Pengaruh Growth Opportunity, Profitabilitas, dan Ukuran Perusahaan terhadap Struktur Modal pada Perusahaan Properti di Bursa Efek Indonesia. Jurnal Manajemen Dan Keuangan, 5(2), 603–614.
Moegiarso, S. (2022). Ekonomi Indonesia Tahun 2022 Tumbuh 5,31 Persen. Ekon.Go.Id.
Mubyarto, N. (2018). The Influence of Profitability on Firm Value using Capital Structure As The Mediator. In Jurnal Economia (Vol. 14, Issue 1). www.idx.co.id
Nirajini, A., & Priya, K. B. (2013). Impact of Capital Structure on Financial Performance of The Listed Trading Companies in Sri Lanka. International Journal of Scientific and Research Publications, 3(5), 1–9.
Nugroho, N. C. (2014). Analisis Pengaruh Profitabilitas, Pertumbuhan Penjualan, Ukuran Perusahaan, dan Umur Perusahaan Terhadap Struktur Modal Usaha Mikro Kecil dan Menengah Kerajinan Kuningan di Kabupaten Pati . Management Analysis Journal, 3(2), 6–10.
Prastika, N. P. Y., & Candradewi, M. R. (2019). Pengaruh Profitabilitas, Struktur Aktiva, Dan Likuiditas Terhadap Struktur Modal Perusahaan Sub Sektor Konstruksi Bangunan Di BEI. E-Jurnal Manajemen, 8(7), 4444–4473.
Prena, G. Das, & Muliyawan, I. G. I. (2020a). Pengaruh Kinerja Keuangan terhadap Nilai Perusahaan dengan Pengungkapan Corporate Social Responsibility Sebagai Variabel Pemoderasi Gine. Jurnal Akuntansi Trisakti, 4(2), 245. https://doi.org/https://doi.org/10.25105/jat.v4i2.4838
Prena, G. Das, & Muliyawan, I. G. I. (2020b). Pengaruh Kinerja Keuangan terhadap Nilai Perusahaan dengan Pengungkapan Corporate Social Responsibility Sebagai Variabel Pemoderasi Gine. Jurnal Akuntansi Trisakti, 4(2), 245. https://doi.org/https://doi.org/10.25105/jat.v4i2.4838
Putra, I. G. W. R., & Sedana, I. B. P. (2019a). Capital Structure as A Mediation Variable: Profitability and Liquidity on Company Value in Real Estate Companies in Indonesia Stock Exchange. International Research Journal of Management, IT and Social Sciences, 6(4), 62–72. https://doi.org/https://doi.org/10.21744/irjmis.v6n4.640
Putra, I. G. W. R., & Sedana, I. B. P. (2019b). Capital structure as a mediation variable: Profitability and liquidity on company value in real estate companies in Indonesia stock exchange. International Research Journal of Management, IT and Social Sciences. https://doi.org/https://doi.org/10.21744/irjmis.v6n4.640
Rosalina, D., & Desti, Y. (2023). The Effect Of Growth Opportunity, Profitability, And Liquidity On Capital Structure With Firm Size As A Moderating Variable In Manufacturing Companies Listed On The Indonesia Stock Exchange In 2015-2019. Jurnal Multidisiplin Dehasen (MUDE), 2(3), 473–486. https://doi.org/https://doi.org/10.37676/mude.v2i3.4345
Safeena, S., & Hassan, M. G. (2014). Impact of Capital Structure on Profitability: A Study of Listed Manufacturing Companies in The Colombo Stock (Sec) Exchange in Sri Lanka.
Sari, I. A. G. D. M., & Sedana, I. B. P. (2020). Profitability and Liquidity on Firm Value and Capital Structure as Intervening Variable. International Research Journal of Management, IT and Social Sciences. https://doi.org/https://doi.org/10.21744/irjmis.v7n1.828
Septiani, N., & Suryana, L. (2018a). Effect of Profitability, Firm Size, Asset Structure, Liquidity, and Growth Opportunity on Capital Structure. E-Journal of Accounting Udayana University, 22(3).
Septiani, N., & Suryana, L. (2018b). Effect of Profitability, Firm Size, Asset Structure, Liquidity, and Growth Opportunity on Capital Structure. E-Journal of Accounting Udayana University, 22(3).
Siddik, M. H., & Chabachib, M. (2017). Pengaruh Roe, Cr, Size, Dan Kepemilikan Institusional Terhadap Nilai Perusahaan Dengan Struktur Modal Sebagai Variabel Intervening. Diponegoro Journal of Management.
Suhardjo, Y., Karim, A., & Taruna, M. S. (2022). Effect of profitability, liquidity, and company size on capital structure: Evidence from Indonesia manufacturing companies. Diponegoro International Journal of Business, 5(1), 70–78. https://doi.org/https://doi.org/10.14710/dijb.5.1.2022.70-78
Suherman, Purnamasari, R., & Mardiyati, U. (2019). MIX: Jurnal Ilmiah Manajemen. Ilmiah Manajemen, 9(2), 327–340.
Sutrisno, S., & Widarjono, A. (2022). Is Profit–Loss-Sharing Financing Matter for Islamic Bank’s Profitability? The Indonesian Case. Risks , 10(11), 207. https://doi.org/https://doi.org/10.3390/risks10110207
Vithessonthi, C., & Tongurai, J. (2015). The effect of firm size on the leverage–performance relationship during the financial crisis of 2007–2009. Journal of Multinational Financial Management, 29, 1–29.
Warsono, & Zoeboedi, F. (2019). Determinasi Nilai Perusahaan dengan Struktur Modal Sebagai Variabel Intervening Pada Perusahaan LQ45 di Indonesia. Jurnal Riset Bisnis, 3(1), 37–53.
Zuhroh, I. (2019). The Effects of Liquidity, Firm Size, and Profitability on the Firm Value with Mediating Leverage. KnE Social Sciences. https://doi.org/https://doi.org/10.18502/kss.v3i13.4206
P-ISSN: 2354-8592 __ E-ISSN: 2621-5055 
