Relationship Model of Capital Structure, Profitability and Profit Growth

Abstract

This study aimed to determine the effect of capital structure and Profitability on profit growth. The sample collected secondary data from companies in the Food and Beverage Industry sub-sector listed on the Indonesia Stock Exchange. The sampling in this study used a purposive sampling method with the following criteria: (1) listed on the Indonesia Stock Exchange; (2) Issued audited financial statements for the period 2017-2019. The data needed in this study was taken from the Indonesia Capital Market Directory (ICMD) 2017-2019. Statistical tests were carried out with t-test and multiple linear regression analysis before this test, first the classical assumption test. The study results show that: Capital structure does not affect profit growth, while Profitability has a significant positive effect on profit growth.