The Effect of Capital Expenditure On Profitability With the Size of Company As The Moderating Variables Totok Haryanto 1 , Maharani Retnaningrum 2 {feb.ump.th@gmail.com 1 , maharani.retna88@gmail.com 2 } Faculty of Business and Economic Universitas Muhammadiyah Purwokerto Abstract. The purpose of this research is to analyze the impact of capital expenditure (CAPEX) on profitability which is moderated by firm size. The variables used in this study is the capital expenditure (CAPEX), Profitability, and Firm Size which is proxied by Ln (Total Assets). The hypothesis in this study is tested using multiple regression analysis (MRA) to examine the impact of independent variables on the dependent variables and moderation. The results illustrated that the CAPEX has an influence on profitability which moderated by firm size. Keywords: Capital Expenditure, Profitability, Size of the Company, MRA 1. Introduction The Indonesian telecommunications industry has experienced rapid development. In accordance with the Presidential Regulation Government Work Plan (Perpres RKP) number 79 of 2017 shows that the actual economic growth of 5.3% in 2016, with projected growth in the range of 5.5-5.9% for 2017. The information and communication sector notedt the biggest growth compared to other sectors, with actual growth of 10.7% in 2016 and 2017 projections in the range of 10.5% -10.9%. This highest growth was dominated by cellular telecommunications, including Telkomsel, Indosat Ooredoo, and XL Axiata. In the effort to meet market demand, and to maintain or increase its market share, and in an effort to increase profitability, the company faces a number of decisions, one of which is a decision on capital expenditure (investment) through capital expenditure or CAPEX. The company's capital expenditure through the acquisition and use of assets is directed to obtain benefits or cash inflows in more than one operating period (accounting). In a study conducted by Fitri [6], there was a significant relationship between an increase in capital expenditure (CAPEX) and an increase in company performance. The research was conducted on 118 manufacturing companies in Indonesia. The results of other studies that used a sample of 116 manufacturing companies, showed that there is a relationship where Return on Assets (ROA) is closely related to the level of profit that is proxied by the value of the company [26]. The result of simultaneous testing shows that CAPEX which is moderated by the company's performance which is proxied by Return on Assets (ROA), has a significant influence on the level of profit [19]. The role of company performance can be interpreted as a moderator variable component of CAPEX to profitability. In this study, it was proven that the econometrics model that included the influence of quasi moderation variables of company ICBAE 2020, August 05-06, Purwokerto, Indonesia Copyright © 2020 EAI DOI 10.4108/eai.5-8-2020.2301085