THE INFLUENCE OF CAPITAL STRUCTURE ON THE PROFITABILITY OF PROPERTY COMPANIES IN INDONESIA

Abstract

The objective of this research is to investigate the influence of capital structure towards performance of company in terms of its profitability and find the proper capital structure design in property sector. The research methodology uses a quantitative method. Multiple regression analysis has been applied to analyze the dependence of independent variables toward dependent variable. The analysis explains that all independent variables simultaneously can describe 63.20% of the dependent variable. Short term debt to total assets, long term debt to total assets, firm size have negative significant influence toward return on assets. Meanwhile, sales growth has positive significant influence towards return on assets. The findings of the research reveal that capital structure has significant influence on profitability of property companies in Indonesia.