Abstract

Having a company is not only able to generate high profits but also able to survive in any conditions. The strength of a company to be able to have a sustainable company is to carry out financial management optimally in the company's operational processes. The purpose of this study was to examine and analyze the effect of liquidity, profitability, and firm size on the capital structure of 26 companies from the results of sample selection using the purposive sampling method on infrastructure, transportation, and utilities listed on the Indonesia Stock Exchange in 2018-2020. The analytical method used in this research is multiple linear regression. The results of this study indicate that liquidity (CR), profitability (ROA) and firm size simultaneously and partially affect the capital structure (DER). Companies with effective capital management show that in conditions of profit, the company will use its capital to finance its obligations. The results of this study are following the pecking order theory. The more a company can meet the needs of its company, the financial condition is considered to survive and be sustainable and create prosperity.

Keywords

liquidity, profitability, size, capital structure, infrastructure