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Optimizing Capital Structure and Company Financial Performance: A Field Theory Approach

Author

Listed:
  • Tasrim, Pahmi
  • Ansri Jayanti
  • Andi Irfan
  • Andi Alim

Abstract

Optimizing company performance is an obligation that must be carried out for the business's survival. However, this is not an easy "thing" to do. Funding decisions are one of the processes in optimizing this performance. This research aims to analyze the optimization of the use of debt on the company's financial performance. This research was conducted at a mining company using time series data. The companies selected are companies that regularly report financial reports and have never experienced losses during the 2010-2022 period. The number of samples is 4 companies. The research uses multiple regression analysis. The research results show that the DAR variable does not significantly affect financial performance (ROA and ROE). Meanwhile, LDTE has a significant effect at the 10% level. The research findings imply that every decision to use debt in the capital structure, especially long-term ones, affects the company's financial performance. So financial managers must pay attention to every decision to use debt in achieving optimal use of debt. This research looks at the development of the use of field theory in financial management research, especially to explain the effects of capital structure and company performance. In addition, this research provides an overview of optimizing the use of debt by looking at the consequences of decisions to use debt.

Suggested Citation

  • Tasrim, Pahmi & Ansri Jayanti & Andi Irfan & Andi Alim, 2025. "Optimizing Capital Structure and Company Financial Performance: A Field Theory Approach," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 21-36.
    • Handle: RePEc:bas:econst:y:2025:i:2:p:21-36
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    File URL: http://archive.econ-studies.iki.bas.bg/2025/2025_02/2025_02_02.pdf
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    References listed on IDEAS

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    5. Grosse-Rueschkamp, Benjamin & Steffen, Sascha & Streitz, Daniel, 2019. "A capital structure channel of monetary policy," Journal of Financial Economics, Elsevier, vol. 133(2), pages 357-378.
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    More about this item

    JEL classification:

    • G00 - Financial Economics - - General - - - General
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G40 - Financial Economics - - Behavioral Finance - - - General
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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