Companies should be more careful in managing their capital structure

Oct 13, 2025 by talynt.org 103 views

The Effect of Profitability and Sales Growth on Debt Policy with Tangibility as a Moderating Variable in Property and Real Estate Companies Listed on the Indonesia Stock Exchange (IDX)

The property and real estate sector is a significant contributor to the Indonesian economy, with many companies listed on the Indonesia Stock Exchange (IDX). One of the key factors that determine the success of these companies is their ability to manage their debt policy effectively. This study aims to analyze the effect of profitability and sales growth on debt policy, with tangibility as a moderating variable, in property and real estate companies listed on the IDX.

The property and real estate sector is a capital-intensive industry that requires significant investment in assets such as land, buildings, and equipment. As a result, companies in this sector often rely on debt financing to fund their operations and growth. However, managing debt is a complex task that requires careful consideration of various factors, including profitability, sales growth, and tangibility.

Previous studies have shown that profitability and sales growth are important factors that influence a company's debt policy. Profitability is a key indicator of a company's ability to generate cash flows, which can be used to service debt. Sales growth, on the other hand, is an important driver of a company's revenue and profitability. However, the relationship between profitability, sales growth, and debt policy is complex and influenced by various factors, including tangibility.

This study used a simple linear regression analysis to test the hypotheses related to the effect of profitability and sales growth on debt policy, with tangibility as a moderating variable. The population consisted of all property and real estate companies listed on the IDX in the 2012-2015 period. A sample of 10 companies was taken from this population, and the data was analyzed using a simple linear regression model.

The results of this study showed that profitability did not have a significant influence on debt policy. This indicates that even though a company generates a profit, it may not use the profit to increase debt. One possibility is that the company prefers to rely on internal funding rather than external debt, which can be related to the financial stability they want.

In addition, sales growth also did not show a significant effect on debt policy. This situation may reflect that although company sales have increased, this does not automatically encourage companies to owe more. Company management may consider various other external and internal factors before deciding to increase their debt burden.

Furthermore, this study also found that tangibility as a moderating variable was unable to significantly moderate the relationship between profitability and debt policy. This indicates that assets that can be liquidated do not make sufficient contributions in determining company decisions related to debt collection, which may be caused by tighter risk management in the property and real estate industry.

The results of this study provide important insights for decision makers in property and real estate companies. Knowing that profitability and sales growth do not have a significant effect on debt policy, companies can be more careful in managing their capital structure. They must consider not only profits and growth, but also other factors such as market conditions, interest rates, and financial risk.

In addition, the results of this study also suggest the need for further exploration of other variables that might affect the debt policy in the property and real estate sector in Indonesia. This includes the role of financial leverage, risk management, and market conditions in determining a company's debt policy.

This study provides a comprehensive analysis of the effect of profitability and sales growth on debt policy, with tangibility as a moderating variable, in property and real estate companies listed on the IDX. The results of this study show that profitability and sales growth do not have a significant effect on debt policy, and that tangibility is not a significant moderating variable in this relationship.

Based on the results of this study, the following recommendations are made:

Companies should be more careful in managing their capital structure: Companies should consider not only profits and growth, but also other factors such as market conditions, interest rates, and financial risk.
Further exploration of other variables is needed: The role of financial leverage, risk management, and market conditions in determining a company's debt policy should be further explored.
Companies should consider alternative funding options: Companies should consider alternative funding options, such as internal funding, rather than relying solely on external debt.

This study has several limitations that should be noted. Firstly, the sample size was limited to 10 companies, which may not be representative of the entire property and real estate sector in Indonesia. Secondly, the study only analyzed the effect of profitability and sales growth on debt policy, and did not consider other factors that may influence debt policy.

This study provides a foundation for further research in the area of debt policy in the property and real estate sector in Indonesia. Future research should aim to explore the role of financial leverage, risk management, and market conditions in determining a company's debt policy. Additionally, further research should aim to analyze the effect of other variables, such as company size, industry, and market conditions, on debt policy.

In conclusion, this study provides a comprehensive analysis of the effect of profitability and sales growth on debt policy, with tangibility as a moderating variable, in property and real estate companies listed on the IDX. The results of this study show that profitability and sales growth do not have a significant effect on debt policy, and that tangibility is not a significant moderating variable in this relationship.
Q&A: The Effect of Profitability and Sales Growth on Debt Policy with Tangibility as a Moderating Variable in Property and Real Estate Companies Listed on the Indonesia Stock Exchange (IDX)

Q: What is the main objective of this study? A: The main objective of this study is to analyze the effect of profitability and sales growth on debt policy, with tangibility as a moderating variable, in property and real estate companies listed on the Indonesia Stock Exchange (IDX).

Q: What is the population of this study? A: The population of this study consists of all property and real estate companies listed on the IDX in the 2012-2015 period.

Q: What is the sample size of this study? A: The sample size of this study is 10 companies, which were taken from the population.

Q: What is the method used to analyze the data in this study? A: The method used to analyze the data in this study is a simple linear regression analysis.

Q: What are the results of this study? A: The results of this study show that profitability and sales growth do not have a significant effect on debt policy, and that tangibility is not a significant moderating variable in this relationship.

Q: What are the implications of this study? A: The implications of this study are that companies in the property and real estate sector should be more careful in managing their capital structure, and should consider not only profits and growth, but also other factors such as market conditions, interest rates, and financial risk.

Q: What are the limitations of this study? A: The limitations of this study are that the sample size is limited to 10 companies, and that the study only analyzed the effect of profitability and sales growth on debt policy, and did not consider other factors that may influence debt policy.

Q: What are the future research directions of this study? A: The future research directions of this study are to explore the role of financial leverage, risk management, and market conditions in determining a company's debt policy, and to analyze the effect of other variables, such as company size, industry, and market conditions, on debt policy.

Q: What are the practical implications of this study for companies in the property and real estate sector? A: The practical implications of this study for companies in the property and real estate sector are that they should consider alternative funding options, such as internal funding, rather than relying solely on external debt, and that they should be more careful in managing their capital structure.

Q: What are the contributions of this study to the existing literature? A: The contributions of this study to the existing literature are that it provides a comprehensive analysis of the effect of profitability and sales growth on debt policy, with tangibility as a moderating variable, in property and real estate companies listed on the IDX, and that it highlights the importance of considering other factors, such as market conditions, interest rates, and financial risk, in determining a company's debt policy.

Q: What are the future research directions of this study in terms of methodology? A: The future research directions of this study in terms of methodology are to use more advanced statistical techniques, such as panel data analysis, to analyze the effect of profitability and sales growth on debt policy, and to use more comprehensive data, such as financial statement data, to analyze the effect of other variables on debt policy.

Q: What are the future research directions of this study in terms of scope? A: The future research directions of this study in terms of scope are to analyze the effect of profitability and sales growth on debt policy in other industries, such as manufacturing and services, and to analyze the effect of other variables, such as company size, industry, and market conditions, on debt policy in the property and real estate sector.