Laili, Rizki Nurul
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The impact of liquidity on the capital structure of construction companies Laili, Rizki Nurul; Dalimunthe, Sholatia
Global Advances in Business Studies Vol. 1 No. 2 (2022): Global Advances in Business Studies (GABS)
Publisher : Ifma Publishing

Show Abstract | Download Original | Original Source | Check in Google Scholar | Full PDF (517.474 KB) | DOI: 10.55584/Gabs.001.02.4

Abstract

The purpose of this research is to examine the effect of liquidity on the capital structure of construction sub-sector companies listed on the Indonesia Stock Exchange. Data was collected using secondary data and library research. The population used in this study comprised all construction sub-sector companies listed on the Indonesia Stock Exchange from 2013–2020. In determining the sample, this research applied the purposive sampling method. This study used a sample of 10 construction sub-sector companies and managed and analyzed a total of 80 observational data using E-views software. The results indicate that liquidity has no significant effect on capital structure as measured by LTDAR. However, liquidity had a significant negative effect on capital structure as measured using DAR, DER, STDAR, LTDER, and STDER. The results support the pecking order theory, which states that liquidity and capital structure have a negative relationship.