Indonesia Conference Directory

The financial structure reflects how the companys assets are spent, thus the financial structure is reflected in the overall liability of the company. For companies that go public such as the Whole Sale And Retail Trade industry, the financial structure is important because the proportion of each source of funds will determine the companys cost of capital. The high value of Cost of Capital companies makes the company more at risk compared to companies with lower capital costs. Companies with high risk are less favored by investors in the capital market. Moreover, for retail companies, where most of their assets are in the form of receivables and inventory, the value depends on the permanence of the level of profitability of each company, so it is not so dependent on long-term debt financing and is more dependent on short-term financing, therefore to make optimal financial structure, management needs to know what factors influence it. The study aims to determine how the influence of asset structure, company size, ROI, operating leverage, sales growth and tax burden on the financial structure of the Whole Sale and Retail Trade industries that go public on the IDX. Firm size, ROI and sales growth have a significant effect on financial structure while asset structure, operating leverage and tax burden have no significant effect on the financial structure.