Liquidity and Profitability of Capital Structure in the Consumer Goods Industry on The Indonesia Stock Exchange
DOI:
https://doi.org/10.31004/joecy.v5i3.3989Keywords:
Liquidity, Profitability, Capital Structure, Consumer Goods Industry, Indonesia Stock ExchangeAbstract
The study purpose was to analyze how liquidity (Quick Ratio) and profitability (Return on Assets, Return on Equity, and Net Profit Margin) affect the capital structure of consumer goods companies listed on the Indonesia Stock Exchange (IDX) from 2021 to 2023 and to provide empirical evidence regarding the applicability of capital structure theories, particularly the Pecking Order Theory, in the Indonesian consumer goods industry. This research employed a quantitative approach using secondary data from annual reports of consumer goods companies published on the IDX website. Out of a population of 57 firms, a purposive sampling method selected 10 companies operating in the food and beverage, cigarette, and pharmaceutical sub-sectors, based on the completeness and consistency of their financial statements. The data were analyzed using multiple linear regression, supported by classical assumption tests including normality, multicollinearity, autocorrelation, and heteroscedasticity to ensure the model's robustness. The data indicates that liquidity (Quick Ratio) and profitability (Return on Assets) have a negative and significant impact on capital structure, while Return on Equity shows a positive and significant effect. Net Profit Margin, however, does not significantly influence capital structure. Overall, liquidity and profitability account for 54.6% of the variation in capital structure, with the remaining influenced by other factors beyond the scope of this study. The findings highlight the importance of liquidity and profitability in guiding corporate financing decisions. They support the Pecking Order Theory and emphasize the need for firms to adopt a balanced financing approach that leverages both internal resources and external debt to promote financial stability and sustainable growth.
References
Ahmed, F. et al. (2024) “Corporate capital structure effects on corporate performance pursuing a strategy of innovation in manufacturing companies,” Heliyon, 10(3). Available at: https://doi.org/10.1016/j.heliyon.2024.e24677.
Akib, M. et al. (2023) “Does Capital Structure, Profitability, and Dividend Policy Improve Stock Prices?,” International Journal of Professional Business Review, 8(6). Available at: https://doi.org/10.26668/businessreview/2023.v8i6.2395.
Akmalia, A. (2022) “Pengaruh Profitabilitas Dan Likuiditas Terhadap Struktur Modal Perusahaan,” Neraca, 18(1). Available at: https://doi.org/10.48144/neraca.v18i1.1192.
Ardekani, A.M. (2024) “Liquidity, interbank network topology and bank capital,” Review of Accounting and Finance, 23(1). Available at: https://doi.org/10.1108/RAF-03-2023-0092.
Ardiana, E. and Chabachib, M. (2018) “Analisis Pengaruh Struktur Modal, Ukuran Perusahaan dan Likuiditas Terhadap Nilai Perusahaan Dengan Profitabilitas Sebagai Variabel Intervening (Studi pada Perusahaan Consumer Goods yang terdaftar di BEI pada Tahun 2012-2016),” Diponegoro Journal Of Management, 7(2).
Aryantini, S. and Jumono, S. (2021) “Profitability and value of firm: An evidence from manufacturing industry in Indonesia,” Accounting, 7(4). Available at: https://doi.org/10.5267/j.ac.2021.2.011.
Ayange, A. et al. (2021) “Effect of capital structure on firms performance in Nigeria,” Universal Journal of Accounting and Finance, 9(1). Available at: https://doi.org/10.13189/ujaf.2021.090102.
Azaroh, F.A., Muhammad, L. and Majidi, S. (2024) “The Effect of Profitability, Sales Growth, Capital Structure and Firm Size on Firm Value (Study of Infrastructure Sector Companies in 2018-2022),” Proceeding Accounting, Management, Economics Uniska, 1(1), p. 2024. Available at: https://icamekaproceedings.fe.uniska-kediri.ac.id/index.php/icameka/article/view/64/60 (Accessed: September 19, 2025).
Brilyandita, S.S. (2023) “Pengaruh ROA, NPM, dan EPS Terhadap Harga Saham Perusahaan Telekomunikasi di BEI,” Jurnal Ilmu dan Riset Manajemen, 12(2).
Brona, A.M. et al. (2022) “Pengaruh Profitabilitas, Resiko Bisnis Dan Pertumbuhan Penjualan Terhadap Struktur Modal pada Perusahaan Property dan Real Estate di BEI Periode 2016 - 2020,” MES Management Journal, 2(1). Available at: https://doi.org/10.56709/mesman.v2i1.44.
Bui, T.N., Nguyen, X.H. and Pham, K.T. (2023) “The Effect of Capital Structure on Firm Value: A Study of Companies Listed on the Vietnamese Stock Market,” International Journal of Financial Studies, 11(3). Available at: https://doi.org/10.3390/ijfs11030100.
Fitri, M., Erlina, E. and Situmeang, C. (2023) “Effect Of Profitability, Liquidity, Free Cash Flow, And Company Size To Company Value With Structure Capitalas Intervening Variables On Mining Companies Listed Instock Exchange Indonesia,” International Journal of Economic, Business, Accounting, Agriculture Management and Sharia Administration (IJEBAS), 3(1). Available at: https://doi.org/10.54443/ijebas.v3i1.636.
Gunardi, A. et al. (2020) “Capital structure determinants of construction firms: Does firm size moderate the results?,” Montenegrin Journal of Economics, 16(2). Available at: https://doi.org/10.14254/1800-5845/2020.16-2.7.
Hasanudin and Nurma Wijareni (2023) “The Effect of Capital Structure, Liquidity, and Firm Size on Company Value with Profitability as an Interverning Variable,” JMKSP (Jurnal Manajemen, Kepemimpinan, dan Supervisi Pendidikan), 8(1). Available at: https://doi.org/10.31851/jmksp.v8i1.12627.
Huang, J.Y. and Hsu, T.Y. (2020) “Effects of experiences of sexual assault, rape myths, and gender biases on sexual assault perpetrated by homosexual men in Taiwan,” Bulletin of Educational Psychology, 52(2). Available at: https://doi.org/10.6251/BEP.202012_52(2).0005.
Imronudin, I. et al. (2022) “The Effect Of Liquidity And Capital Structure To Increase Firm Value Through Increasing Financial Performance,” Riset Akuntansi dan Keuangan Indonesia [Preprint]. Available at: https://doi.org/10.23917/reaksi.v7i3.22174.
Indomo, I.L. and Lubis, A.W. (2023) “Capital structure behaviour among Indonesian property developers during different business cycles,” Journal of Financial Management of Property and Construction, 28(1). Available at: https://doi.org/10.1108/JFMPC-07-2021-0050.
Indrawati, R. and Hanif, F. (2023) The Effect of Good Corporate Governance, Capital Structure on Financial Performance with Profit Management as Mediation: Case Study in the Health Industry, International Journal Publishing INFLUENCE: International Journal of Science Review. Available at: https://influence-journal.net/index.php/influence/index.
Irawan, D.C. et al. (2022) “The Effect Of Capital Structure, Firm Size, And Firm Growth On Profitability And Firm Value,” Quality - Access to Success, 23(187). Available at: https://doi.org/10.47750/QAS/23.187.06.
Isnaeni, D. and Mas’amah, M. (2023) “Effect of Capital Structure on Profitability at PT. Indofood CBP Sukses Makmur Tbk on Indonesia Stock Exchange,” Journal Of Economics, Finance And Management Studies, 06(04). Available at: https://doi.org/10.47191/jefms/v6-i4-12.
Khadijah, S., Rozi, F. and Nursidin, M. (2023) “Pengaruh Profitabilitas, Tingkat Pertumbuhan Dan Tingkat Pajak Terhadap Struktur Modal Pada Perusahaan Real Estate Dan Property Yang Terdaftar Di Bursa Efek Indonesia Periode 2017-2019,” Worksheet : Jurnal Akuntansi, 2(2). Available at: https://doi.org/10.46576/wjs.v2i2.3462.
Kim, Y., Jung, S. and Kim, C. (2023) “The Impact of Capital Structure on the Profitability Performance of ICT Firms,” Processes, 11(2). Available at: https://doi.org/10.3390/pr11020635.
Krisnugraha, B., Rahayu, T. and Supardiyono, Y. (2022) “Pengaruh Manajemen Laba, Ukuran Perusahaan, Likuiditas, dan Profitabilitas terhadap Agresivitas Pajak,” EXERO : Journal of Research in Business and Economics, 4(1). Available at: https://doi.org/10.24071/exero.v4i1.5028.
Kulikov, A. et al. (2023) “Modelling Optimal Capital Structure in Gas and Oil Sector by Applying Simulation Theory and Programming Language of Python (Qatar Gas Transport Company),” Energies, 16(10). Available at: https://doi.org/10.3390/en16104067.
Ben Lahouel, B. et al. (2024) “Financial stability, liquidity risk and income diversification: evidence from European banks using the CAMELS–DEA approach,” Annals of Operations Research, 334(1–3). Available at: https://doi.org/10.1007/s10479-022-04805-1.
Lestari, A.I.D. (2023) “Pengaruh Roe, Gpm, Npm Dan Eps Terhadap Harga Saham Perusahaan Pertambangan Sub Sektor Logam Dan Sejenisnya,” Jurnal Ilmu dan Riset Manajemen, 12(3).
Lestari, P.M. and Mutia, F. (2023) “Critical literacy: prevents negative impact of clickbait news on news agency website,” Library Hi Tech News, 40(1). Available at: https://doi.org/10.1108/LHTN-02-2022-0027.
Lestari, T.E. and Rahmat, N.S. (2018) “Analysis of Quality Control using Statistical Process Control (SPC) in Bread Production,” Indonesian Journal of Fundamental Sciences, 4(2). Available at: https://doi.org/10.26858/ijfs.v4i2.7637.
Linawati, N. et al. (2022) “The effect of profitability and bank size on firm value sustainability: The mediating role of capital structure,” Investment Management and Financial Innovations, 19(2). Available at: https://doi.org/10.21511/imfi.19(2).2022.29.
Lyubov, T. and Heshmati, A. (2023) “Impact Of Financial Crises On The Dynamics Of Capital Structure: Evidence From Korean Listed Companies,” Singapore Economic Review, 68(3). Available at: https://doi.org/10.1142/S0217590819500498.
Mayolla, S.O.M. and Apriani, L. (2023) “Student Motivation on Physical Education Learning For Senior High School,” INSPIREE: Indonesian Sport Innovation Review, 4(01). Available at: https://doi.org/10.53905/inspiree.v4i01.108.
Mulia, D. and Setyawan, I.R. (2022) “Pengaruh Profitability, Capital Structure dan Dividend Policy terhadap Nilai Perusahaan Perbankan,” Jurnal Manajerial Dan Kewirausahaan, 4(2). Available at: https://doi.org/10.24912/jmk.v4i2.18228.
Naeem, M. et al. (2023) “A Step-by-Step Process of Thematic Analysis to Develop a Conceptual Model in Qualitative Research,” International Journal of Qualitative Methods, 22. Available at: https://doi.org/10.1177/16094069231205789.
Nguyen, H. et al. (2022) “The Impact Of Internal Financial Determinants On The Financial Performance Of Listed Mineral Firms On The Vietnam Stock Exchange,” Corporate Governance and Organizational Behavior Review, 6(2 Special Issue). Available at: https://doi.org/10.22495/cgobrv6i2sip13.
Nguyen, H.M., Wong, W.K. and Vuong, T.H.G. (2023) “Market Capitalized Scale and Corporate Capital Structure - Evidence from CSI300’s Listed Firms,” Annals of Financial Economics, 18(3). Available at: https://doi.org/10.1142/S2010495223500021.
Nguyen, K.Q.T. (2023) “Does National Governance Affect the Capital Structure of Listed Firms during the COVID-19 Pandemic?,” Emerging Science Journal, 7(Special issue). Available at: https://doi.org/10.28991/ESJ-2023-SPER-04.
Nurwulandari, A. (2021a) “Effect of Liquidity, Profitability, Firm Size on Firm Value with Capital Structure as Intervening Variable,” Atestasi : Jurnal Ilmiah Akuntansi, 4(2). Available at: https://doi.org/10.57178/atestasi.v4i2.271.
Nurwulandari, A. (2021b) “Effect of Liquidity, Profitability, Firm Size on Firm Value with Capital Structure as Intervening Variable,” ATESTASI : Jurnal Ilmiah Akuntansi, 4(2). Available at: https://doi.org/10.33096/atestasi.v4i2.835.
Oktaviyanti, I. and Sumartik, S. (2023) “The Pecking Order Theory Perspective in the Study of Company Capital Structure (Study On Manufacturing Companies On The Indonesia Stock Exchange),” JBMP (Jurnal Bisnis, Manajemen dan Perbankan), 9(1). Available at: https://doi.org/10.21070/jbmp.v9i1.1643.
Priatna, H., Anggraini, I. and Ananda, I. (2023) “Effect Of Asset Structure And Capital Structure On Profitability,” Journal of Accounting Inaba, 2(01). Available at: https://doi.org/10.56956/jai.v2i01.195.
Putri, R.A. and Meirisa, F. (2025) “Pengaruh NPM Dan DER Terhadap Return Saham Perusahaan Sektor Basic Materials Periode 2019-2023,” Journal of Management and Bussines (JOMB), pp. 77–82. Available at: https://doi.org/https://doi.org/10.31539/jomb.v7i2.14573.
Shahzad, K. et al. (2023) “Exploring the nexus of corporate governance and intellectual capital efficiency: from the lens of profitability,” Quality and Quantity, 57(3). Available at: https://doi.org/10.1007/s11135-022-01472-z.
Sihombing, P., Hutajalu, C.B.B. and Suparyati, A. (2023) “Financial Performance and Capital Structure on Firm Value with Commodity Prices as a Moderating Variable,” Research of Business and Management, 1(2). Available at: https://doi.org/10.58777/rbm.v1i2.80.
Siti Fatimah (2022) “Pengaruh Struktur Modal, Profitabilitas, dan Ukuran Perusahaan Terhadap Nilai Perusahaan Pada Perusahaan Indeks BUMN20 yang Terdaftar di Bursa Efek Indonesia Tahun 2018-2019,” Jurnal Riset Manajemen dan Bisnis, 1(2). Available at: https://doi.org/10.29313/jrmb.v1i2.456.
Sumardi Putra, K. and H. Mustafa, M. (2021) “The Effect Of Profitability, Company Size, Liquidity, And Assets Structure On Capital Structured In LQ45 Index Manufacturing Issuers In The Indonesia Stock Exchange In 2014-2019,” Dinasti International Journal of Education Management And Social Science, 2(6). Available at: https://doi.org/10.31933/dijemss.v2i6.973.
Tang, M. et al. (2024) “Fintech, bank diversification and liquidity: Evidence from China,” Research in International Business and Finance, 67. Available at: https://doi.org/10.1016/j.ribaf.2023.102082.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 Retnowati Jasa, Roy Rocky Suprapto Baan, Budiawan
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
