The Effect of Liquidity, Profitability and Size Ratios on Capital Structure and Implications for the Value of Manufacturing Industry Companies Listed on the IDX

Abstract

The purpose of this study was to analyze the effect of the company's Liquidity, Profitability, Size Ratio on Capital Structure and its implications on the value of the company in Manufacturing companies on the Indonesia Stock Exchange. The study population was 8 manufacturing companies in LQ45 registered in the Jakarta Islamic Index (JII). Determination of the sample using nonprobability sampling technique that is purposive sampling obtained as many as 5 companies registered in the period 2012-2016. The analytical method used is path analysis with the trimming model. The results showed that current ratio (CR) has a direct effect on debt to equaty ratio (DER), return on asset (ROA) has a direct effect on debt to equaty ratio (DER), Size does not affect debt to equaty ratio (DER), current ratio (CR) does not directly affect earning per share, return on asset (ROA) directly affects earning per share (EPS), debt to equaty ratio (DER) direct effect on earning per share (EPS), current ratio (CR) indirect effect on earning per share (EPS) through debt to equaty ratio (DER) and return on asset(ROA)in direct effect on earning per share(EPS)through debt to equity ratio(DER)