The Measurement of Capital Structure and Profitability on Company’s Value

Authors

  • Auliya Muslimah*, Putri Ghaeshany, Shalma Allaya, Ayu Novi, Suskim Riantani

Abstract

Burdensome regulations and mining commodity price decreased has impact to the financial
performance some of mining industries in Indonesia. The need for fresh capital to improve
the financial performance has led these industries to restructure their sources of capital.
The research analyzed and investigated the capital structure measured by debt to equity
ratio, profitability measured by return on asset and earning per share and its effect to
company’s value measured by the stock price. The research method uses descriptive and
verificative methods. The investigations employed the panel data regression models.
Observations were made on 31 mining and mining service industries listed in Indonesia
Stock Exchange for 2015-2019 period used the purposive sampling method. The findings
showed that debt to equity ratio has negative and significant effect to the stock price, return
on asset and earning per share has positive and significant effect to the stock prices during
the investigation period.

Published

2020-10-17

Issue

Section

Articles