The Relevancy Financial Performance on Capital Structure and The Impact on the Firm Value

Abstract

We investigate the relevancy impact of financial performance, particularly related to profitability and liquidity on capital structure and its impact on the firm value on the Indonesia Stock Exchange for the 2017-2021 period. Our sample consist of 65 companies in property industry. We use purposive sampling and obtained 45 property companies. Data analysis in the study used panel data regression by utilizing the Eviews statistical program version 10 and resulted that profitability had no significant effect on the capital structure. Then, liquidity was found to has a negative effect on the capital structure. Finally, the capital structure has a positive effect on firm value.