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The Role of Profitability in the Effect of Company Growth on the Debt Policy

Author

Listed:
  • Akhmadi Akhmadi
  • Dabela Yunia
  • Robiyanto Robiyanto

Abstract

This study aims to examine the role of profitability as a mediating variable on the effect of company growth on debt policy. The samples were companies of textile and garment sub-sector listed on the Indonesia Stock Exchange in the 2014-2018 period. The results show that asset growth (AG) did not affect the debt to equity ratio (DER). In addition, return on asset (ROA) was found to have a positive effect on the DER. Meanwhile, the ROA could not mediate the effect of asset growth on the DER.

Suggested Citation

  • Akhmadi Akhmadi & Dabela Yunia & Robiyanto Robiyanto, 2020. "The Role of Profitability in the Effect of Company Growth on the Debt Policy," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(4), pages 267-274, July.
    • Handle: RePEc:jfr:ijfr11:v:11:y:2020:i:4:p:267-274
    DOI: 10.5430/ijfr.v11n4p267
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    References listed on IDEAS

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