International Conference on Eurasian Economies
1-3 July 2014 – Skopje, MACEDONIA
Paper detail
Paper ID : 896
Status : Paper published
Language : English
Topic : Finance and Financial Crises
Presenter: Prof. Dr. Euphrasia Susy Suhendra
Session : 3A Sectoral Analysis
Factors Impacting Capital Structure in Indonesian Food and Beverage Companies
Factors Impacting Capital Structure in Indonesian Food and Beverage Companies
- Prof. Dr. Euphrasia Susy Suhendra (Gunadarma University, Indonesia)
Abstract
Capital structure is directly related with the financial decision of the company. Capital structure theories seek to explain why businesses choose different mixes of debt and equity to finance their operations. The concept is generally described as the combination of debt & equity that make the total capital of firms. It usually comprises all the sources of finance that a company is utilizing to finance its operations. The aim of this study is to know the major determinants of capital structure, the factors that affect capital structure. This study has used the data from 17 food and beverages Indonesian firms over a time period of 3 years (20010-2012). Debt to equity ratio (DER) is a dependent variable which is defined as the ratio of total debt to equity of the observed company, and there are five independent variables, which are liquidity, profitability, asset tangibility, firm size, and firm growth. As a result of this study, there are two variables that have a significant effect toward Capital Structure in sector of Food and Beverages Companies; they are Liquidity and Asset Structure with significant negative correlation. The other three remaining independent variables which are Profitability, Firm Size, and Asset Growth do not have significant effect toward the Capital Structure in sector of Food and Beverages Company.
JEL codes: C58, E22
Suhendra, Euphrasia Susy (2014). "Factors Impacting Capital Structure in Indonesian Food and Beverage Companies" in Proceedings of International Conference of Eurasian Economies 2014, pp.75-82, Skopje, MACEDONIA.
DOI: https://doi.org/10.36880/C05.00896
