The Effect of Sales Growth and Profitability on the Capital Structure of PT Unilever Indonesia TBK, 2010-2021

Abstract

In this study, we to determine the effect of sales growth (X1) and profitability calculated by Return on Equity / ROE (X2) on capital structure calculated by Debt to Equity Ratio / DER (Y). Multiple linear regression analysis was carried out after processing data on sales growth, ROE, and DER which were sourced from the quarterly financial reports of PT Unilever Indonesia Tbk for 2010-2021. The t-test results show that while probability has a positive influence and is important to the capital structure, variable sales growth has a negative and minor impact on it. However, the findings of the coefficient of determination test demonstrate that sales growth and profitability account for 79.1% of the capital structure variable, with an adjusted R square value of 79.1. Other factors not included in this research model account for the remaining 20.1%.