Business, Management and Accounting
4 years ago

Profitability negatively impacts capital structure in manufacturing companies, study finds.

THE INFLUENCE OF ASSET STRUCTURE, COMPANY SIZE, AND PROFITABILITY ON CAPITAL STRUCTURE IN BASIC AND CHEMICAL INDUSTRY SUB-SECTOR MANUFACTURING COMPANIES LISTED ON IDX 2014-2017 PERIOD
Tabita Octaria Simanjuntak, Rosdiana Febrina Sari Siregar, Dina Wati Simbolon, Mohd. Nawi Purba

Paper Summary

The study looked at how different factors like asset structure, company size, and profitability affect the way companies get their money (capital structure). They used data from 22 manufacturing companies in Indonesia from 2014-2017. The results showed that asset structure and company size didn't really impact capital structure, but profitability did - it had a negative and significant effect.

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