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Determination of Capital Structure of Public Companies in Indonesia

Author

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  • Anita Handayani
  • Rahmat Agus Santoso

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.

Suggested Citation

  • Anita Handayani & Rahmat Agus Santoso, 2020. "Determination of Capital Structure of Public Companies in Indonesia," Journal of Social Science Studies, Macrothink Institute, vol. 7(1), pages 8-18, June.
    • Handle: RePEc:mth:jsss88:v:7:y:2020:i:1:p:8-18
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    References listed on IDEAS

    as
    1. Myers, Stewart C, 1984. "The Capital Structure Puzzle," Journal of Finance, American Finance Association, vol. 39(3), pages 575-592, July.
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