Universal Journal of Accounting and Finance 10(2): 411-424, 2022 http://www.hrpub.org
DOI: 10.13189/ujaf.2022.100205
Manufacturing Company Debt and Its Moderation
Effect on Capital Structure: The Case of Public
Company in Indonesia
Isti Pujihastuti
1,*
, Ujang Maman
2
, Iwan Aminudin
2
, Kuncoro Hadi
3
, Hanny Nurlatifah
3
,
Rusdiono Mukri
4
, Sudirah
5
1
Department of Management, Faculty of Economy and Business, Universitas Islam “45” Bekasi, Indonesia
2
Agribusiness Post Graduate Program, Faculty of Science and Technology, Universitas Islam Negeri Syarif Hidayatullah Jakarta,
Indonesia
3
Department of Management, Faculty of Economy and Business, University of Al-azhar Indonesia, Indonesia
4
Sahid Islamic Entrepreneurial University, Indonesia
5
Faculty of Law, Social and Political Science, Universitas Terbuka Indonesia, Indonesia
Received October 19, 2021; Revised January 11, 2022; Accepted February 8, 2022
Cite This Paper in the following Citation Styles
(a): [1] Isti Pujihastuti, Ujang Maman, Iwan Aminudin, Kuncoro Hadi, Hanny Nurlatifah, Rusdiono Mukri, Sudirah ,
"Manufacturing Company Debt and Its Moderation Effect on Capital Structure: The Case of Public Company in
Indonesia," Universal Journal of Accounting and Finance, Vol. 10, No. 2, pp. 411 - 424, 2022. DOI:
10.13189/ujaf.2022.100205.
(b): Isti Pujihastuti, Ujang Maman, Iwan Aminudin, Kuncoro Hadi, Hanny Nurlatifah, Rusdiono Mukri, Sudirah (2022).
Manufacturing Company Debt and Its Moderation Effect on Capital Structure: The Case of Public Company in
Indonesia. Universal Journal of Accounting and Finance, 10(2), 411 - 424. DOI: 10.13189/ujaf.2022.100205.
Copyright©2022 by authors, all rights reserved. Authors agree that this article remains permanently open access under the
terms of the Creative Commons Attribution License 4.0 International License
Abstract Debt is one of the important sources of fund
for Indonesian companies. The previous research of
manufacturing companies listed on Indonesia Stock
Exchange (IDX) in 2015-2017 indicated debt to equity
ratio is 111%. The debt could probably cause
disadvantages. There are requirements from external
parties when companies request sources of funds,
especially when conducting Initial Public Offerings (IPOs).
There should also be debt covenants between company and
debtor. However, the proper debt management will have a
positive effect on capital structure. Therefore, this research
aims to explore the effect of long-term debt (LTD), fixed
assets (FA), earnings per share (EPS) and net income (NI)
on capital structure (CS), assuming that LTD will moderate
the effect of FA, EPS, and NI on equity. The research
sample is 32 of manufacturing companies that conducted
IPOs on IDX in period of 2018-2020, which were
purposively taken based on the criteria of publishing
annual financial report and having complete data needed in
this research. Fortunately, the research found 11 companies
for 2018; 9 companies for 2019; and 12 companies for
2020. The multiple linear regressions with cross data
section show NI, FA, and EPS affect CS significantly;
while LTD does not influence CS. However, the LTD
significantly quasi-moderates the effect of FA on CS.
While the LTD significantly moderates purely the effect of
NI on CS. Therefore, the companies should manage the NI
for investment in FA and increase the effectiveness of
LTD’s management in optimizing capital structure.
Keywords Initial Public Offering, Company Debt,
Fixed Assets, Earnings Per Share, Net Income, Equity
1. Introduction
Sources of company funds can ensure the
implementation of effective organizational processes. On
the other hand, the lack of funds has a serious impact on the
company, the production process falters, the company's
sales are hampered, then the company's goals as a
profit-oriented institution cannot be achieved, and the
company's profits decline. It is clear that on a micro scale