Capital Structure Determinants And It's Influence To Value Of The Firm

Capital Structure Determinants And It’s Influence To Value Of The Firm

Every year, wholesale and retail industry in Indonesia always grow positively, even in the Asia Pasific region its the fastest. Therefore, investors see this as one of promising investment but Indonesia Capital Market Directory data indicates that most of wholesale and retail company is a high risk company, defined by company capital structure. Because of that before making decision to investment, investor need to analyze financial report to know determinants of capital structure and its influence to value of the firm.
Analysis was performed using financial statement data of 21 wholesale and retail companies listed on Indonesia Stock Exchange in 2008-2012 using path analysis to see the direct and indirect influence of independent variable ( liquidity, profitability and firm size) to dependent variable (value of the firm and capital structure) and whether the capital structure is an intervening variable. Results of analysis proved that independent variables simultaneously and partially significant influence to capital structure but it doesn’t significantt influence to value of the firm but if its through capital structure, then its partially and simultaneously significant influence to value of the firm. Its means that capital structure is proven as an intervening variable.

Created by :
Shelly & Erman Munzir


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