The Effect of Liquidity, Profitability, Asset Growth and Company Size on Capital Structure

Measurement of capital structure can be done using the Debt to Equity Ratio (DER). DER is a comparison between total debt and total equity [13]. The following is the DER calculation:

3.2.2 Independent Variables

Liquidity

Measurement of the liquidity ratio uses the Current ratio (CR) which is an indicator in measuring a company's ability to fulfill its short-term obligations with its total current assets [14]. The following is the calculation of liquidity:

Profitability

Measurement of profitability ratios uses Return on Assets (ROA) by comparing net profit after tax with total assets [15]. The following is a profitability calculation using ROA:

Asset Growth

Measurement of asset growth can be done by calculating the difference between the total assets of the current period (t) and the total assets of the previous period (t-1) divided by the total assets of the previous period (t-1) [5]. The following is the calculation of asset growth:

Company Size

Calculation of company size can be done using the natural logarithm (Ln) of total assets [16] The following is a calculation of company size:

IV. ANALYSIS OF THE RESULTS AND DISCUSSION

4.1 Population and Sample

The population in this study are companies listed on the Jakarta Islamic Index (JII). With the amount of data obtained as many as 60 companies for four periods and 14 outlier data. The sampling technique in this study used purposive sampling, namely the technique of taking or determining the sample based on consideration of certain criteria. Thus, the final sample was obtained as many as 46 samples.

4.2 Descriptive Statistical Analysis

Source: Secondary data processed by the author, 2023

Based on the table above, it shows that the number of samples (N) is 46 company data during the 2018 to 2021 period with the results of the descriptive statistical tests as follows:

1. The variable liquidity has the lowest value of 0.67 and the highest value of 4.97 with an average of 2.1935 and a standard deviation of 1.17592.