The Effect of Current Ratio, Net Profit Margin, Sales Stability, Asset Structure, and Business Risk on Capital Structure (A Study of Manufacturing Companies in the Consumer Non-Cyclical Sector Listed on the Indonesia Stock Exchange in 2019-2023)
Analysis reveals how current ratio and net profit margin negatively affect capital structure in manufacturing firms, suggesting financial strategy implications.
Key Points
Current ratio, net profit margin, and asset structure negatively affect capital structure, indicating critical financial decision-making factors.
The most significant metric showed a negative influence from current ratio on capital structure in manufacturing companies.
This observational analysis used Partial Least Square (PLS) – Structural Equation Modeling (SEM) to evaluate the impacts.
Understanding these relationships may enable better financial planning strategies in this sector of the economy.