Determination of Capital Structure of Public Companies in Indonesia

Anita Handayani and Rahmat Agus Santoso

Journal of Social Science Studies, 2020, vol. 7, issue 1, 8-18

Abstract: Capital structure is definitely related to the company’s long-term expenditure. Capital structure compares long-term debt to own capital. Corporate funding policies can be obtained from internal and / or external companies. So the purpose of this study is to analyze the capital structure of public companies in Indonesia. In the process of determining capital structure determination using multiple linear regression statistics, the results of the study are Return On Assets, Total Asset Turnover, and Current Ratio have a negative influence on the capital structure of public companies in Indonesia. So it can be concluded that public companies in Indonesia use internal funds more than external capital because internal capital does not create a fixed burden for the company.

Keywords: Capital structure; Return on assets; Total asset turnover; Current ratio (search for similar items in EconPapers)
Date: 2020
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