The Impact of Funding Strategy Through the Firm Size On Profitability

Suryani, Arna (2020) The Impact of Funding Strategy Through the Firm Size On Profitability. Journal of Talent Development and Excellence, 12 (2s). pp. 998-1006. ISSN 18692885

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Abstract

This study aims to examine and analyze the impact of funding strategy through firm size on profitability . The funding strategy is measured by operating leverage and financial leverage, the firm size is measured by the Ln total assets of the firm, while profitability is measured by return on investment. The research sample is all of the LQ45 firms listed in Indonesia Stock Exchange in the 2014-2018 periods. The analytical method is descriptive verification analysis, data analysis by using path analysis with the hypothesis testing F and t. Based on the result of the research was found that the funding strategy simultaneously affect toward the firm size, while the profitability has no significant effect. Partially, only the financial leverage has the significant effect on the firm size by giving a negative influence direction of 0.505, while on the profitability of funding strategy does not have a significant effect. But, the firm size has a significant effect on the profitability. These results also prove that the funding strategy if through the firm size gives effect to the profitability with a total effect about 2.99%. The results of this research indicate that the funding strategy can affect into the profitability if through the firm size. The funding strategy can be used as one of the basic considerations for decision making in the financial sector, especially to maximize the corporate profitability.

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