Analysis Of Factors That Influence Capital Structure With Company Size As A Moderating Variable In Consumer Goods Companies Listed On The IDX

Feb 27, 2025 by ADMIN 142 views

**Analysis of Factors Affecting Capital Structure with Company Size as Moderating Variables in Consumer Goods Companies Listed on the IDX**

Introduction

Capital structure is a crucial component in a company's financial decisions, affecting its ability to grow and continue its business operations. In the context of Consumer Goods companies, which often face demand fluctuations, understanding the factors that affect the capital structure becomes essential. This study aims to analyze the effect of various factors on the company's capital structure, with a focus on Consumer Goods companies listed on the Indonesia Stock Exchange (IDX) from 2012 to 2015. The factors evaluated include profitability, sales growth, asset structure, liquidity, operating leverage, and business risk. Additionally, this research explores whether the size of the company can moderate the relationship between these factors and the capital structure.

Research Background

Capital structure is a critical aspect of a company's financial decisions, as it affects its ability to grow and continue its business operations. In the context of Consumer Goods companies, which often face demand fluctuations, understanding the factors that affect the capital structure becomes very crucial. By analyzing data from 33 companies listed on the IDX during the specified period, this study uses a causality approach to identify the relationship between variables.

Importance of Capital Structure in Consumer Goods Companies

Capital structure is essential for Consumer Goods companies, as it affects their ability to invest in new products, expand their market share, and respond to changes in demand. A well-structured capital structure can help companies to:

Improve profitability: By optimizing their capital structure, companies can reduce their cost of capital and improve their profitability.
Increase competitiveness: A well-structured capital structure can help companies to invest in new products and technologies, improving their competitiveness in the market.
Enhance long-term growth: A well-structured capital structure can help companies to invest in new markets and expand their business operations, enhancing their long-term growth.

Methodology

The method used in this study involved sampling census from 33 companies, which produced 132 observations. The data collected is then analyzed using multiple linear regression and residual tests, to determine the simultaneous and partial effects of the independent variables on the capital structure.

Data Collection

The data used in this study was collected from 33 Consumer Goods companies listed on the IDX from 2012 to 2015. The data includes:

Financial statements: The financial statements of the companies, including their balance sheets, income statements, and cash flow statements.
Market data: The market data of the companies, including their stock prices, trading volumes, and market capitalization.

Data Analysis

The data was analyzed using multiple linear regression and residual tests, to determine the simultaneous and partial effects of the independent variables on the capital structure.

Research Result

The test results show that simultaneously, profitability, sales growth, asset structure, liquidity, operating leverage, and business risks have a significant influence on the capital structure. However, when analyzed partially, only sales growth, asset structure, liquidity, and operating leverage showed a significant effect. Meanwhile, profitability and business risks have no significant effect on capital structure.

Simultaneous Effect

The simultaneous effect of the independent variables on the capital structure shows that:

Profitability: Has a significant positive effect on the capital structure.
Sales growth: Has a significant positive effect on the capital structure.
Asset structure: Has a significant positive effect on the capital structure.
Liquidity: Has a significant positive effect on the capital structure.
Operating leverage: Has a significant positive effect on the capital structure.
Business risks: Has a significant negative effect on the capital structure.

Partial Effect

The partial effect of the independent variables on the capital structure shows that:

Sales growth: Has a significant positive effect on the capital structure.
Asset structure: Has a significant positive effect on the capital structure.
Liquidity: Has a significant positive effect on the capital structure.
Operating leverage: Has a significant positive effect on the capital structure.
Profitability: Has no significant effect on the capital structure.
Business risks: Has no significant effect on the capital structure.

Further Analysis

The absence of significant influence of the company's size as a moderating variable may be caused by several factors. First, large consumer goods companies may have better access to external financing, so that the size factor does not play a role in the capital structure decision. Second, the characteristics of the Consumer Goods industry that are very competitive can create other factors, such as liquidity and sales growth, more dominant in determining the capital structure.

Access to External Financing

Large consumer goods companies may have better access to external financing, which can reduce the importance of the company's size in determining the capital structure. This can be due to several factors, including:

Better credit rating: Large companies may have a better credit rating, which can reduce their cost of capital and improve their access to external financing.
Greater market presence: Large companies may have a greater market presence, which can improve their ability to access external financing.
Improved financial stability: Large companies may have improved financial stability, which can reduce their risk and improve their access to external financing.

Competitive Characteristics of the Consumer Goods Industry

The characteristics of the Consumer Goods industry that are very competitive can create other factors, such as liquidity and sales growth, more dominant in determining the capital structure. This can be due to several factors, including:

High competition: The Consumer Goods industry is highly competitive, which can create a high demand for liquidity and sales growth.
Short product life cycle: The product life cycle in the Consumer Goods industry is short, which can create a high demand for liquidity and sales growth.
High marketing and advertising expenses: The Consumer Goods industry is characterized by high marketing and advertising expenses, which can create a high demand for liquidity and sales growth.

Conclusion

This study provides an important insight into the factors that affect the capital structure in the consumer goods sector in Indonesia. These results can be a reference for companies in formulating more effective financial strategies. With a better understanding of the effect of profitability, sales growth, asset structure, liquidity, and operating leverage, companies can optimize their capital structure to increase competitiveness and long-term growth.

Recommendations

Based on the results of this study, it is recommended that the company conducts periodic evaluations of the factors that affect the capital structure and considers the right strategy to increase profitability and efficiency of the use of assets. This can be achieved by:

Conducting regular financial analysis: Conducting regular financial analysis can help companies to identify the factors that affect their capital structure and make informed decisions.
Developing a financial strategy: Developing a financial strategy can help companies to optimize their capital structure and increase their competitiveness and long-term growth.
Improving financial stability: Improving financial stability can help companies to reduce their risk and improve their access to external financing.

By following these recommendations, companies can optimize their capital structure and increase their competitiveness and long-term growth.

Introduction

Q: What is capital structure?

A: Capital structure refers to the mix of debt and equity used by a company to finance its operations and investments. It is a critical component in a company's financial decisions, affecting its ability to grow and continue its business operations.

Q: Why is capital structure important in Consumer Goods companies?

A: Capital structure is essential for Consumer Goods companies, as it affects their ability to invest in new products, expand their market share, and respond to changes in demand. A well-structured capital structure can help companies to improve profitability, increase competitiveness, and enhance long-term growth.

Q: What are the factors that affect capital structure in Consumer Goods companies?

A: The factors that affect capital structure in Consumer Goods companies include:

Profitability: The ability of a company to generate profits from its operations.
Sales growth: The rate at which a company's sales increase over time.
Asset structure: The mix of tangible and intangible assets used by a company to generate revenue.
Liquidity: The ability of a company to meet its short-term financial obligations.
Operating leverage: The use of fixed costs to generate revenue.
Business risks: The risks associated with a company's operations, such as market risks, credit risks, and operational risks.

Q: How does company size affect capital structure in Consumer Goods companies?

A: Company size can affect capital structure in Consumer Goods companies, as larger companies may have better access to external financing and may be able to take on more debt. However, the results of this study show that company size does not have a significant effect on capital structure in Consumer Goods companies.

Q: What are the implications of this study for Consumer Goods companies?

A: The results of this study have several implications for Consumer Goods companies. Firstly, companies should focus on improving their profitability, sales growth, asset structure, liquidity, and operating leverage to optimize their capital structure. Secondly, companies should consider the right strategy to increase profitability and efficiency of the use of assets. Finally, companies should conduct periodic evaluations of the factors that affect their capital structure to make informed decisions.

Q: What are the limitations of this study?

A: This study has several limitations. Firstly, the study only focuses on Consumer Goods companies listed on the IDX from 2012 to 2015. Secondly, the study only considers a limited number of factors that affect capital structure. Finally, the study does not consider the impact of external factors, such as economic conditions and industry trends, on capital structure.

Q: What are the future research directions?

A: Future research directions include:

Extending the study to other industries: The study only focuses on Consumer Goods companies. Future research can extend the study to other industries, such as manufacturing, services, and finance.
Considering more factors: The study only considers a limited number of factors that affect capital structure. Future research can consider more factors, such as market risks, credit risks, and operational risks.
Analyzing the impact of external factors: The study does not consider the impact of external factors, such as economic conditions and industry trends, on capital structure. Future research can analyze the impact of external factors on capital structure.

By answering these FAQs, this article provides a comprehensive understanding of capital structure in Consumer Goods companies and its implications for companies.