4(9): , 2017 DOI:

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1 The International Journal of Social Sciences and Humanities Invention 4(9): , 2017 DOI: /ijsshi/v4i9.04 ICV 2015: ISSN: , THEIJSSHI Research Article The Influence of Return on Assets, Return on Equity, Current Ratio, Firm Size and Assets Structure on Capital Structure of Mining Companies That are Registered in Indonesia Stock Exchange Muis Fauzi Rambe, S.E., M.M 1,Yulis Putry, S.E., M.M 2 1 Universitas of Muhammadiyah Sumatera Utara 2 Graduate University Of Muhammadiyah Sumatera Utara Abstract: Users of financial statements require financial information from the company to analyze the financial performance of the company concerned. Financial ratios can be used as a tool to find out the future Capital Structure. This study focuses on the usefulness of Return On Assets, Return On Equity, Current Ratio, Firm Size, and Assets Structure to see Capital Structure in the future. In this study used 3 financial ratios. This study aims to determine the effect of partial and simultaneous Return On Assets, Return On Equity, Current Ratio, Firm Size, and Assets Structure to Capital Structure at Mining companies listed on the Indonesia Stock Exchange. The sampling technique used was saturated sampling where all the population was sampled by 10 companies for the study period of The test used in this research is descriptive statistic, classical assumption test (normality test, multicolinearity test, and heteroscedasticity test), multiple linear regression is used as an analytical tool, to test the hypothesis (ttest and F-test), and test the coefficient of determination. The results of statistical tests show that partially Return On Assets, Return On Equity and Assets Structure have a significant effect on Capital Structure, while Current Ratio, Firm Size has no effect on Capital Structure (Debt To Equity Ratio) in the future. Then, Return On Assets, Return On Equity, Current Ratio, Firm Size, and Assets Structure simultaneously influence sìgnifìkan against Capital Structure (Debt To Equity Ratio) in the future. Thus the users of financial statements can consider these ratios as a tool of consideration in decision making. The result of determination coefficient 41,5% indicate that 41,5% variation of Capital Structure value influenced by Return On Assets, Return On Equity, Current Ratio, Firm Size, and Assets Structure, the rest 58,5% influenced by variable Others not examined in this study. Keywords: Return on Assets, Current Ratio, Firm Size, Assets Structure and Capital Structure. INTRODUCTION A. Background In conducting its business activities, a company always needs funds and capital in order to maintain the continuity of its operations. The need for such capital can be either the working capital or the purchase of fixed assets. Developing company can derive its capital from debt, because it is non-permanent and easier to hold, it is often an important part of the company's Capital Structure. According to Sundjaja (2002, p. 239) states that, in order to achieve the company's goals of maximizing owner s wealth, financial manager should be able to assess the company's capital structure and understand its relationship to risk, outcome/return and value. Capital Structure is the use of loan capital that aims to maximize owner s wealth. One of the decisions which are faced by financial manager in relation to the continuity of the company's operational activities is the funding decision and Capital Structure decision. According to Sjahrial (2007, p. 236), regardless of which approach will be taken to determine the optimal Capital Structure, financial manager needs to consider several factors, namely sales level, asset structure, sales growth level, profitability, profitability variability and tax protection, company scale, company internal conditions and macroeconomics. Based on the factors affecting the Capital Structure above, there are several problems that exist from the source of financial statement information in the Mining companies. It is known that Debt to Equity Ratio has increased of 3 companies and decreased of 7 companies in Mining companies that are registered in Indonesia Stock Exchange. In this case the funding of the company is not fully financed by debt, since the total debt of the company is not so great if it is compared to the total of owner's equity. In other words, the company is still able to cover its debts with its equity. So that the company is able to manage the loan funds, and causes the funding that is derived from debt is not too increased. Return On Assets has increased by 5 companies and decreased by 5 companies in Mining companies that are registered in Indonesia Stock Exchange. This means that the company is not good at generating profits. This situation is not maximal enough because there are the decrease and increase at the same value in managing any assets that are invested to generate profits. Return On Equity has increased by 6 companies and decreased by 4 companies in Mining companies that are registered in Indonesia Stock Exchange. This means that the company is 3918 The International Journal of Social Sciences and Humanities Invention, vol.4, Issue 9, September, 2017

2 able to manage all owner's equity which is invested to generate profits, because of the total equity of capital owners that are used by the company, the comparison is the profit generated is higher. Current Ratio has increased by 5 companies and decreased by 5 companies in Mining companies that are registered in Indonesia Stock Exchange. This shows that the company's current debt is guaranteed by the company's current assets, it means that the company is considered less than maximized in paying its short-term liabilities/debts with its current assets, but is still quite stable in its debt repayment. Firm Size has increased by 5 companies and decreased by 5 companies in Mining companies that are registered in Indonesia Stock Exchange. This shows that the company is less than maximized to get additional capital opportunity to develop its company, because the average value of total assets is the same at the increase and decrease. So that will affect the capital and size of the company itself, and it is considered not good because it can lead to bankruptcy in the future. Assets Structure has increased by 5 companies and decreased by 5 companies in Mining companies that are registered in Indonesia Stock Exchange. This means that the company is considered less than maximized to guarantee its long-term debt, and less optimal in the utilization of its assets with the decline in assets in the company, and it can result in the company is unable to develop itself by using a larger debt loan to become capital. Based on the above data, it can be seen that some companies that are less optimal because there are more use of debt and owner's equity than the use of assets in Mining companies. B. Problem Identification Based on the description in the background of problems above, the identification of problems in this study are as follows: 1. The increase in Debt to Equity Ratio (DER) is 3 companies from 10 Mining Companies in the period of This can have a less effective influence, because the companies are having an increase in debt, and it can make the company have trouble in paying the debt in the future if the increase continues to occur. 2. The decrease in Return On Assets (ROA) is 5 companies from 10 Mining Companies in the period of This means that the companies are less able to manage any assets which are invested to generate maximum profit if the decline continues to occur. 3. The decrease in Return On Equity (ROE) is 4 companies from 10 Mining Companies in the period of Overall the companies are considered not maximal enough 4. The decrease in Current Ratio is 5 companies from 10 Mining Companies in the period of The companies are considered less than maximized in paying its short term liabilities/debts with its current assets if the decline continues to occur. 5. The decrease in Firm Size is 5 companies from 10 Mining Companies in the period of This is considered not good because it can adversely influence the future development of the company if the decline continues to occur. 6. The decrease in Assets Structure is 5 companies from 10 Mining companies in the period of The company is considered less than optimal in the utilization of its assets, due to the decrease of assets in the company and could result in it is not able to develop itself by using a larger debt loan to become capital. C. Problem Limitation and Formulation 1. Problem Limitation So that the problem in this research is not widespread, the researcher only limits on one ratio of Debt to Equity Ratio (DER) as ratio of Capital Structure. And due to many factors that influence Capital Structure, the researcher limits on one ratio of Return On Assets (ROA), Return On Equity (ROE) as the ratio of Profitability, Current Ratio (CR) as the ratio of Liquidity, Firm Size, and Assets Structure. 2. Problem Formulation Based on the description, the problem formulations in this study are: a. Do Return On Assets, Return On Equity, Current Ratio, Firm Size, and Assets Structure partially influence on Capital Structure of Mining companies that are registered in Indonesia Stock Exchange? b. Do Return On Assets, Return On Equity, Current Ratio, Firm Size, and Assets Structure simultaneously influence on Capital Structure of Mining companies that are registered in Indonesia Stock Exchange? THEORETICAL BASIS 1. Capital Structure Basically, Capital Structure is the result of funding decision that essentially chooses to use debt or equity to fund the company s operations, and each of these options has a different influence on the company's value. According to Sjahrial (2007, p.24) Capital Structure is a balance between the use of loan capital which consists of: short-term debt that is permanent, long-term debt with owner s capital which consists of: preferred stock and common stock. The basis of Capital Structure is related to the source of company s fund either it is internal source or external source of the company. In the practice there are several types of Capital Structure ratios which are used by company. According to Kashmir (2012, p.155) states that there are several types of ratios that exist: a. Debt To Assets Ratio 3919 The International Journal of Social Sciences and Humanities Invention, vol.4, Issue 9, September, 2017

3 b. Debt To Equity Ratio c. Long Term Debt To Equity Ratio d. Tangiable Assets Debt Coverage e. Current Liabilities To Net Worth f. Times Interest Earned g. Fixed Charge Coverage From some ratio above, the researcher only uses one kind of ratio measurement only, that is Debt To Equity Ratio. According Husnan (2004, p.70) explains that Debt To Equity Ratio shows the comparison between debt with owner s capital. High Debt to Equity Ratio has a bad influence on the company s performance because the higher the debt level means the greater the interest burden which means less profit. On the contrary, the lower Debt to Equity Ratio level shows the better performance, because it causes the higher the return rate. The ratio in measuring the capital structure that is used by the researcher is Debt to Equity Ratio (DER), which is the ratio of debt to capital that describes how far the owner's capital can cover the debts to outsiders. According to Kashmir (2012, p.157), Debt to Equity Ratio is the ratio that is used to assess debt with equity. In other words, how much the company's assets are financed by debt or how big the debt of the company influences the management of assets. 2. Return On Assets Return On Assets is one ratio of profitability which is a common measurement tool that is used to assess the success of the company in overall. According Syamsudin (2009, p.65) mentions, Return On Assets is a measure of the company s ability in overall to generate profits with the total assets that is available in the company. Return On Assets (ROA) has a goal not only for business owners or management, but also for the parties outside the company, especially the parties who have relationships or interests with the company. Return On Assets shows the company's ability to generate profit from the assets that are used. Return On Assets is the most important ratio among profitability ratios. Return On Assets is obtained by comparing net income after tax to total assets. According Syamsudin (2009, p.63) Return On Assets can be formulated as follows: Net Profit ROA = Return on Equity After Taxes Total Assets Return on Equity becomes one of the important elements in making investment decisions. This ratio is used as an indicator or source of information about the company's ability to generate profits as it is viewed from the returns that are received by investors and about how the company manages its assets. According to Sofyan (2007, p 305) states that, Return On Equity (ROE) is a ratio that shows how many percent of net income that is obtained if it is measured from the owner's capital. Return on Equity measures the ability of a company to make a profit that is available to the company's shareholders or to find out the amount of return which is given by the company for each rupiah from owner s capital. According to Brigham & Houston (2010, p.148) the formula of the use of Return On Equity is: Net Profit After Taxes ROE = Total Equity 3. Current Ratio Liquidity Ratio can be used to determine whether there has been irregularities in carrying out the company's operational activities. According Kasmir (2012, p.110) states if the company is able to meet its obligations, it is said the company is in a state of liquidity. On the contrary, if the company is not able to meet these obligations, it is said the company is in a state of illiquid. Current ratio is one of the most commonly used ratios to measure the company's liquidity or its ability to meet short-term obligations without facing difficulties. The greater the ratio of current assets to lancer debt, the higher the company's ability to cover its short-term liabilities. The measurement of Current Ratio According to Kashmir (2012, p.113) states that the formula to find Current Ratios can be used as follows: Current Ratio = Current Assets Current Liabilities 4. Firm Size (Company Size) Firm size is a measure that indicates the size of the company. According to Machfoedz (2005, p. 56) concerns in firm size is a scale that can be classified by the size of a company in various ways. Among others: Total assets, log size, stock market value, and others. Basically, the size of the company is divided into three categories: big companies, medium companies, small companies. The determination of the size of the company is based on the total assets of the company. Measurements about the size of a company can be assessed or viewed through the assets that it has. According to Harahap (2000, p.254), the size of a company is assessed by the company's assets over a given year. The size of the company can be measured by total assets/large company s assets by using total assets/ 5. Assets Structure (Structure of Assets) Asset Structure is a thing that reflects the two components outline in the composition of total assets and fixed assets. According to Weston and Brigham (2005, p. 175), Asset Structure is the balance or comparison between fixed assets 3920 The International Journal of Social Sciences and Humanities Invention, vol.4, Issue 9, September, 2017

4 and total assets. Total assets are the sum of current assets and non-current assets of the company. Asset structure is the wealth or economic resources that are owned by the company that is expected to provide benefits in the future, which consists of fixed assets, intangible assets, current assets, and non-current assets. How to measure it is by comparing between fixed assets with total assets. According to Alkhatib (2012, p.17), the asset structure formula is as follows: Assets Structure = Fixed Assets Total Assets 6. Conceptual Framework The Influence of Return On Assets, Return On Equity, Current Ratio, Firm Size, and Assets Structure on Capital Structure (Debt to Equity Ratio) can be described in the following conceptual framework: Exchange (BEI), which publishes their audited financial statements from the period of 2009 to 2014 are 10 Mining companies that are registered in Indonesia Stock Exchange. This study uses sampling technique that is saturated sampling, it is a sample determination technique when all members of the population are used as sample Sugiyono (2010, p. 78), the sample in this study is 10 Mining companies that are registered in Indonesia Stock Exchange. The data used is secondary data (external). Data collection is obtained from the financial statements of Mining companies that are registered in Indonesia Stock Exchange in Data analysis techniques are Descriptive Statistics, multiple linear regression analysis by doing the classical assumption test previously. Then, it performs hypothesis test by using t test for partial test and F test for simultaneous test, and coefficient of determination to find how big the variation of free variable influence dependent variable. RESEARCH RESULT AND DISCUSSION Descriptive Statistics Descriptive analysis of the data which is taken for this study is from 2009 to 2014 are 60 observation data. Descriptive variables in the descriptive staristics which are used in this study include the value of minimum, maximum, mean and standard deviations of one dependent variable, namely Capital Structure (Debt To Equity) and five independent variables: Return On Assets, Return On Equity, Current Ratio, Firm Size, and Assets Structure. Descriptive statistical distribution for each variable is contained in Table 1.1 below: 7. Hypothesis To clarify the discussion that has been done, the hypothesis in the study is as follows: 1. Return On Assets, Return On Equity, Current Ratio, Firm Size, and Assets Structure partially influence Capital Structure (Debt to Equity Ratio in Mining companies that are registered in Indonesia Stock Exchange. 2. Return On Assets, Return On Equity, Current Ratio, Firm Size, and Assets Structure simultaneously influence Capital Structure (Debt to Equity Ratio in Mining companies that are registered in Indonesia Stock Exchange. Tabel 1.1 Descriptive Statistics RESEARCH METHODS The research approach which is used is associative approach. This study uses quantitative data in the form of financial statements of Mining Companies that are Registered in Indonesia Stock Exchange. The population which is used in this study are all Mining companies that are registered in Indonesia Stock Exchange (BEI) which publishes their audited financial statements from the period of 2009 to 2014 are 10 companies that are registered in Indonesia Stock Exchange. The sampel is all Mining companies that are registered in Indonesia Stock Data Analysis This study uses multiple linear regression analysis technique. In order for the regression model to be interpreted then the existing multiple regression model must be free from the classical assumptions, which include 1. Normality Test The normality test for this study is used Kolmogorov Smirnov test 3921 The International Journal of Social Sciences and Humanities Invention, vol.4, Issue 9, September, 2017

5 Tabel 1.2 One-Sample Kolmogorov-Smirnov Test Standardized Predicted Value N 60 Normal Mean 0E-7 Parameters a,b Std. Deviation 1, Absolute,085 Most Extreme Positive,081 Differences Negative -,085 Kolmogorov-Smirnov Z,661 Asymp. Sig. (2-tailed),775 a. Test distribution is Normal. b. Calculated from data. Gambar 1.1 From the data results in the table above, it can be obtained the Kolmogorov smirnov result is and significance value is The significance value turns out to be greater than 0.05 then H 0 is accepted which means that the residual data is normally distributed 2. Multicollinearity Test The results of multicollinearity test can be seen in the following table. Tabel 1.3 Coefficients a Model (Constant) Collinearity Statistics Tolerance VIF ROA,108 9,301 ROE,103 9,723 CR,551 1,816 FIRM SIZE,840 1,191 ASSETS STRUCTURE,870 1,149 It can be concluded that there is no heteroscedasticity in the regression model so that the regression model is suitable to see Debt to Equity Ratio of Mining Companies that are registered in Indonesia Stock Exchange based on independent variable of Return On Assets, Return On Equity, Current Ratio, Firm Size, and Assets Structure. After the data is tested classical assumption and obtained data that is normally distributed, multicolinearity does not occur, and heterocedasticity does not occur, then further data can be analyzed with multiple linear regression analysis. Tabel 1.4 Coefficients a Dependent Variable: Debt To Equity Ratio From the results of existing tests, it can be concluded that there is no symptom of multicolinearity between independent variables which are indicated from the tolerance value of each independent variable that is greater than 0.1 and VIF value is smaller than 10. Then it can be concluded that further analysis can be done by using Multiple linear regression model. 3. Heterocedasticity Test Heterocedasticity test aims to test whether in the regression model there is a variance inequality of one observation residual to another observation. A good regression model is no heteroscedasticity. How to detect the presence or absence of heteroscedasticity is to look at the plot graph between the predicted values of the dependent variable. Basic analysis to determine whether there is heteroscedasticity or not is: a. Dependent Variable: Debt To Equity Ratio The results are put into multiple linear regression equations so that the following equations are known: Y = X X X X X 5 Hypothesis Test a. Partial Test (t-test) The results of statistical tests t in the above table can be explained as follows: 3922 The International Journal of Social Sciences and Humanities Invention, vol.4, Issue 9, September, 2017

6 Tabel 1.5 Coefficients a Model Unstandardized Coefficients B Std. Error Standardized Coefficients Beta t Sig. (Constant) 1,892,194 9,759,000 Return On Assets Return On Equity Current Ratio Firm Size Assets Structure -10,456 3,592 -,974-2,911,005 4,828 1,901,789 2,540,014 -,104,065 -,213-1,588,118 2,191E- 009,000,035,318,752-1,454,446 -,348-3,258,002 a. Dependent Variable: Debt To Equity Ratio 1) The Influence of Return On Assets to Debt to Equity Ratio The t count value for Return On Assets variable is and the t table with α = 5% is known at Thus -t table is larger and equal to t count and t count is smaller and equal to t table ( ) and the significance value is (less than 0.05) which means H 0 is rejected and H a is accepted. Based on these results it can be concluded that H 0 is rejected and H a is accepted, it shows that partially it has negative and significant influence on Return On Assets to Debt to Equity Ratio of Mining Companies that are registered in Indonesian Stock Exchange at 95% confidence level. a. The Influence of Firm Size on Debt to Assets Ratio The t count value for Firm Size variable is and t table with α = 5% is known at Thus t count is smaller and equal to t table and t count is smaller and equal to -t table ( ) and significance value is (more than 0.05) which means H 0 is accepted and H a is rejected. Based on these results it can be concluded that H 0 is accepted and H a is rejected, it shows that partially it has positive and insignificant influence on Firm Size to Debt to Equity Ratio at Mining Companies that are registered in Indonesian Stock Exchange at 95% confidence level. b. The Influence of Assets Structure on Debt to Assets Ratio The t count value for Assets Structure variable is and t table with α = 5% is known at Thus -t table is smaller and equal to t count and t count is greater and equal to t table ( ) and significance value is (less than 0.05) which means H 0 is rejected and H a is accepted. Based on these results it can be concluded that H 0 is rejected and H a is accepted, it shows that partially it has negative and significant influence on Assets Structure to Debt to Equity Ratio at Mining Companies that are registered in Indonesian Stock Exchange at 95% confidence level. i. Simultaneous Significance Test (F-Test) The F statistic test is performed to test whether the independent variable (X) simultaneously has a significant relationship or not to the dependent variable (Y). Based on the results of data processing with SPSS program Version 19.00, it is obtained the following results: 2) The Influence of Return On Equity to Debt to Equity Ratio The t count value for Return On Equity variable is and the t table with α = 5% is known at Thus -t table is smaller and equal to t count and t count is greater and equal to t table ( ) and significance value is (less than 0.05) which means H 0 is rejected and H a accepted. Based on these results it can be concluded that H 0 is rejected and H a is accepted, it shows that partially it has positive and significant influence on Return On Equity to Debt to Equity Ratio at Mining Companies that are registered in Indonesian Stock Exchange at 95% confidence level. 3) The Influence of Current Ratio to Debt to Equity Ratio The t count value for Current Ratio variable is and t table with α = 5% is known at Thus -t table is smaller and equal to t count is smaller and equal to t table ( ) and the significance value is (more than 0.05) which means H 0 is accepted and H a is rejected. Based on the result, it can be concluded that H 0 is accepted and H a is rejected, it shows that partially it has negative and not significant influence on Current Ratio to Debt to Equity Ratio at Mining Companies that are registered in Indonesian Stock Exchange at 95% confidence level. Tabel 1.6 ANOVA a Model Sum of Squares df Mean Square 3923 The International Journal of Social Sciences and Humanities Invention, vol.4, Issue 9, September, F Sig. Regression 23, ,682 9,376,000 b Residual 26,965 54,499 Total 50, a. Dependent Variable: Debt To Equity Ratio b. Predictors: (Constant), Assets Structure, Return On Equity, Firm Size, Current Ratio, Return On Assets From ANOVA (Analysis Of Variance) test in the above table it can be reached F-count of with significance level is 0.00 while the F-table is known at Based on these results it can be seen that -F table is smaller and equal to F count and F count is larger and equal to F table ( ) so that H 0 is reject and H a is accepted. So it can be concluded that variables of Return On Assets, Return On Equity, Current Ratio, Firm Size, and Assets Structure together significantly influence on Debt to Equity Ratio at Mining Companies that are registered in Indonesian Stock Exchange. Coefficient of Determination (R-Square)

7 Coefficient of determination serves to determine the percentage at the influence of independent variables and dependent variable that is by squaring coefficients that are found. In its use, coefficient of determination is expressed as a percentage (%). How far the contribution or percentage at the influence of Return On Assets, Return On Equity, Current Ratio, Firm Size, and Assets Structure on Debt to Equity Ratio then it can be known through the test of determination. Tabel 1.7 Model Summary b Model R R Square Adjusted R Square In the table above, it can be seen the results of regression analysis in overall shows Adjusted R Square (R 2 ) value or coefficient of determination is This figure identifies that Debt to Equity Ratio (dependent variable) can be explained by Return On Assets, Return On Equity, Current Ratio, Firm Size, and Assets Structure (independent variable) at 41.5%, while the rest of 58.5% is explained by other causes which are not examined in this study. Then the standard error of the estimate is or 70.7 where the smaller this number will make the regression model more appropriate in predicting Debt to Equity Ratio. DISCUSSION Std. Error of the Estimate Durbin - Watso n 1,682 a,465,415, ,079 a. Predictors: (Constant), Assets Structure, Return On Equity, Firm Size, Current Ratio, Return On Assets b. Dependent Variable: Debt To Equity Ratio The results of this study is an analysis of the research findings on the appropriateness of theory, opinion, and previous research that has been raised the results of previous research and behavior patterns that must be done to overcome it. Here are 6 main parts that will be discussed in the findings analysis of this study, as follows: 1. The Influence of Return On Assets to Capital Structure (Debt to Equity Ratio) The study results that are obtained on the influence of Return On Assets on Capital Structure (Debt to Equity Ratio) is the result of hypothesis test partially that shows the value of t count for Return On Assets variable is and t table with α = 5% is known at Thus -t table is larger and equal to t count and tcount is smaller and equal to t table ( ) and the significance value is (less than 0.05) which means H 0 is rejected and H a is accepted. Based on these results it can be concluded that H 0 is rejected and H a is accepted, it shows that it partially has significant influence on Return On Assets on Debt to Equity Ratio at Mining Companies that are registered in Indonesian Stock Exchange in period of This means that the ups and downs of Return On Assets from period to period have a big influence on Debt to Equity Ratio. Meanwhile, the negative sign of the test results shows that with the decrease in Return On Assets, it will have an increase in debt, which with the increase in debt due to reduced profits that is generated by the company, thus it makes the company's operational funding not only derived from profit but also from additional debt to cover the lack of capital. A low profit return makes it impossible to finance most of the funding needs. This study is in line with the research that is conducted by Damayanti (2013), and Ticoalu (2013) which states that Return On Assets significantly influences Debt to Equity Ratio. Likewise with the theory of Brigham and Houston (2010, pp. 189) which states that, Companies with very high returns on investment turn out to use relatively small amounts of debt but, in this study, it reversely happens that the low rate of taking turns with debt in large quantities. Based on the results of the above study, the authors can conclude that there is conformity between the study results with theories, opinions and previous research that Return On Assets significantly influences Debt to Equity Ratio. 2. The Influence of Return On Equity to Capital Structure (Debt to Equity Ratio) The study results which are obtained on the influence of Return On Equity to Capital Structure (Debt to Equity Ratio) is the result of partial hypothesis test which shows that the value of t count for Return On Equity variable is and t table with α = 5% is known at Thus -t table is smaller and equal to t count and t count is larger and equal to t table ( ) and significance value is (less than 0.05) which means H 0 is rejected and H a is accepted. Based on these results it can be concluded that H 0 is rejected and H a is accepted, it shows that it partially has significant influence on Return On Equity to Debt to Equity Ratio at Mining Companies that are registered in Indonesian Stock Exchange period of This means that the ups and downs of Return On Equity from period to period have a great influence on the Debt to Equity Ratio. Meanwhile, a positive sign of the test results indicate that with the increase Return On Equity will experience an increase in debt as well, where with the increase in profits due to the addition of capital derived from debt. Then the increase in profits can also be said to be almost equal to the increase in interest expense, so that the increase in profit is not proportional to the decrease in debt because the increase in profit is only to pay interest expense. This study is in line with the research that is conducted by Sari, Haryanto (2013), and Hartoyo (2014) who suggest that Return On Equity has positive and significant influence on capital structure. Similarly, the theory according to Sartono (2010, p.124), states that Return on Equity measures the ability of company to obtain profits which are available to shareholders of the company. This ratio is also influenced by the size of the company's debt if the proportion of debt is larger then this ratio will also be larger The International Journal of Social Sciences and Humanities Invention, vol.4, Issue 9, September, 2017

8 Based on the results of the above study, the authors can conclude that there is conformity between the study results with opinions, theories, and previous research, namely Return on Equity significantly influences on Debt to Equity Ratio. 3. The Influence of Current Ratio to Capital Structure (Debt to Equity Ratio) The study results which are obtained on the influence of Current Ratio to Capital Structure (Debt to Equity Ratio) is the result of partial hypothesis test which shows that the t count value for Current Ratio variable is and t table with α = 5% is known at Thus -t table is smaller and equal to t count and t count is smaller and equal to t table ( ) and the significance value is (larger than 0.05) which means H 0 is accepted and H a is rejected. Based on these results, it can be concluded that H 0 is accepted and H a is rejected, it shows that it partially has not significant influence on Current Ratio to Debt to Equity Ratio at Mining Companies that are registered in Indonesian Stock Exchange period of This means that the rise and fall of Current Ratio from period to period has little influence on Debt to Equity Ratio. Meanwhile, the negative sign of the test results indicate that with the decrease of Current Ratio then there will be an increase in Debt To Equity Ratio. The decline in Current Ratio, a company is considered less able to pay all its shortterm liabilities. In other words to pay the entire short-term debt is used the result of long-term debt addition. So that makes long-term debt increases and causes Debt To Equity Ratio rises. As according to Kasmir (2012, p.115) states if the current ratio is low, it can be said that the company is less capital to pay the debt. However, if the results of the measurement ratio is high, it does not mean that the condition of the company is being good. This can happen because cash is not being used as well as possible. But in this case Current Ratio which is down is not so influence on the increase of long-term debt, because the decline in current assets in paying short-term debt can be covered by cash directly and not necessarily with the accumulation of overall current assets. So there are other factors that have greater influence on long-term debt such as cash ratio. This study is in line with the research which is conducted by Seftianne, Handayani (2011), and Fury, Saifudin (2012) who found that current ratio has negative influence on capital structure. Likewise, the existing theory that other factors which have greater influence on debt is Cash Ratio. Based on the study results above, the authors can conclude that there is conformity between the study results, theory with the opinion and previous research, Current Ratio has no significant influence on Debt to Equity Ratio. 4. The Influence of Firm Size on Capital Structure (Debt to Equity Ratio) The study results which are obtained on the influence of Firm Size to Capital Structure (Debt to Equity Ratio) is the result of partial hypothesis test which shows that t count value for Firm Size variable is and t table with α = 5% is known equal to Thus t count is smaller and equal to t table and t count is smaller and equal to -t table ( ) and significance value is (larger than 0.05) which means H 0 is accepted and H a is rejected. Based on these results, it can be concluded that H 0 is accepted and H a is rejected, it shows that it partially has no significant influence on Firm Size to Debt to Equity Ratio at Mining Companies that are registered in Indonesian Stock Exchange period of This means that the ups and downs of Firm Size from period to period have little influence on Debt to Equity Ratio. Meanwhile, the positive sign of the test results indicate that with the increase in Firm Size it will increase in Debt To Equity Ratio. With the increase in total assets, the company will be likely to get debt guarantees for additional capital in developing the company. However, the addition of existing debt for working capital is still less useful in generating maximum profit. This study is in line with the research which is conducted by Liwang (2011) which states that firm size does not significantly influence capital structure. Similarly, with the existing theory that other factors that are likely to have greater impact on debt, like the age of the company, according to Sitanggang (2013, p.75) says that established companies will have strong networks with financial institutions so it will be easier to gain additional capital with debt. Because of the ease of access/network it means that large companies have greater flexibility to increase debt. Based on the study results above, the authors can conclude that there is a conformity between the study results with opinion, theory, and previous research, Firm Size has no significant influence on Debt to Equity Ratio. 5. The Influence of Assets Structure on Capital Structure (Debt to Equity Ratio) The study results which is obtained on the influence of Assets Structure on Capital Structure (Debt to Equity Ratio) is the result of partial hypothesis test which shows that the t count value for Assets Structure variable is and t table with α = 5% is known equal to Thus -t table is smaller and equal to t count and t count is larger and equal to t table ( ) and the significance value is (less than 0.05) which means H 0 is rejected and H a is accepted. Based on these results it can be concluded that H 0 is rejected and H a is accepted, this shows that it has partially significant influence on Assets Structure to Debt to Equity Ratio at Mining Companies that are registered in Indonesian Stock Exchange period of This means that the ups and downs of the Assets Structure from period to period have a great influence on the Debt to Equity Ratio. Meanwhile, the negative sign of the test results indicates that with the decrease in Assets Structure it will increase in Debt to Equity Ratio as well. Management is very concerned about Assets Structure in its decision to use or 3925 The International Journal of Social Sciences and Humanities Invention, vol.4, Issue 9, September, 2017

9 increase debt. Big companies that are in terms of having high total assets as well, often use debt as additional capital. The addition of debt is also considered as a source of funding which is low risk of company s bankruptcy. Meanwhile, the decrease in Assets Structure is due to the decrease of total assets which results in the lack of company s capital, so the company raises new debt for capital increase in maximizing profit. This study is in line with the research which is conducted by Kartika (2009), Liwang (2011), which says that Assets Structure has significant influence on Capital Structure. Similarly, according to theories of Brigham and Houston (2010, p 39), states that Companies whose assets are suitable for credit guarantees tend to use more debt. The higher the Asset Structure the higher the Capital Structure which means the greater the fixed assets that can be used as debt collateral by the company. Based on the study results above, the authors can conclude that there is a confirmity between the study results with opinions, theories, and previous research, Assets Structure significantly influences Debt to Equity Ratio. 6. The Influence of Return On Assets, Return On Equity, Current Ratio, Firm Size, and Assets Structure altogether to Capital Structure (Debt to Equity Ratio) The study results which are obtained are about the influence of Return On Assets, Return On Equity, Current Ratio, Firm Size, and Assets Structure altogether to Capital Structure (Debt to Equity Ratio) at Mining Companies that are registered in Indonesian Stock Exchange. From ANOVA (Analysis Of Variance) test results it is obtained that F-count is with a significance level is while F-table is known at Based on these results it can be seen that -F table is smaller and equal to F count and F count is larger and equal to F table ( ) so it rejects H 0 and accepts H a. So it can be concluded that the variable of Return On Assets, Return On Equity, Current Ratio, Firm Size, and Assets Structure altogether significantly influence Debt to Equity Ratio at Mining Companies that are registered in Indonesian Stock Exchange. The study result above proves that if altogether Return On Assets, Return On Equity, Current Ratio, Firm Size, and Assets Structure have significant influence to Capital Structure. This means any level of liquidity in short-term debt repayment, and profitability in profit making, and firm size and asset structure are closely related to long-term debt use, as debt is a low cost source of risk for company s bankruptcy. Debt is also a good alternative to developing a company in generating profits rather than relying only on profit earned funds. Then, with a relationship rate of only 41.5% it means that 58.5% is influenced by other factors such as, according to Sitanggang (2013, 73) The structure of Company's capital is influenced by several factors, namely: "Sales stability, company tax position, pay interest expense, future management attitude, asset structure, dividend policy, firm size, company age, business type of company". This study is in line with the research which is conducted by Sari, Haryanto (2013), Ticoalu (2013), and Damayanti (2013) which says that Return On Assets, Return On Equity, Current Ratio, Firm Size, and Assets Structure altogether has significant influence to Capital Structure. Based on the study results above, the authors can conclude that there is a confirmity between study results with opinions, and previous research, namely that Return On Assets, Return On Equity, Current Ratio, Firm Size, and Assets Structure altogether significantly influence on Capital Structure. CONCLUSIONS AND RECOMMENDATIONS Conclusion 1. Return On Assets negatively and significantly influences on Capital Structure (Debt to Equity Ratio). 2. Return On Equity positively and significantly influences on Capital Structure (Debt to Equity Ratio). 3. Current Ratio negatively and insignificantly influences on Capital Structure (Debt to Equity Ratio). 4. Firm Size positively and insignificantly influences on Capital Structure (Debt to Equity Ratio). 5. Assets Structure negatively and significantly on Capital Structure (Debt to Equity Ratio). 6. Return On Assets, Return On Equity, Current Ratio, Firm Size, and Assets Structure altogether significantly influence Capital Structure (Debt to Equity Ratio) with 41.5% relation level. It has the meaning that the level of liquidity, company profits, and firm size and asset structure influence on debt. Because debt is a funding source of low risk of company s bankruptcy. Debt is also a good alternative to developing a company in generating profits rather than relying only on profit earned funds. With a relationship rate of only 41.5% means that there is 58.5% influenced by other factors. Recommendation Based on the above conclusions, then in this case the author can suggest the things as follows: 1. Company has not been said to be good, because with a low rate of return makes the company difficult in performing operational funding. Thus, for inflating the existing capital, company uses debt as an addition. It is expected that company can further improve and maximize profit so that it does not need to continuously make additional debt. 2. It is recommended that companies should be more effective and efficient in managing sources of funds, assets and equity, so that debt can be paid and the rest of the funds source can be reused into additional capital of the company. 3. Companies should be able to optimize the use of capital so that the rate of return can increase and it can pay the entire short-term debt. Thus, the company does not need 3926 The International Journal of Social Sciences and Humanities Invention, vol.4, Issue 9, September, 2017

10 to use any additional long-term debt to cover part of its short-term debt. 4. It is recommended that the use of company s debt is able to maximize the loan as an additional capital to generate profits. In order for the company to grow larger it does not have to use the debt as additional capital, because it already has a high current assets. So the company only uses the profit to avoid accumulation of debt if it can not pay it. 5. Company should increase profit maximally, so that it is able to recycle profit into capital. And so it does not need to add more debt to increase the capital. 6. Company should pay attention to the performance of the company's management on other sectors which influence the factors of Capital Structure because Return On Assets, Return On Equity, Current Ratio, Firm Size, and Assets Structure do not fully influence on the achievement of company s objectives. This can be done by recruiting expert and skilled financial personnel in analyzing financial condition and having high dedication and loyalty to the company. 7. If investors want to invest, then to those who want to invest should more pay attention to the factors that can influence Capital Structure of the company. But for other researchers it is advisable to continue or follow up the study of other factors, such as sales stability, company tax position, ability to pay interest expense, future management attitude, asset structure, dividend policy, firm size, company age, etc. REFERENCE Alkhatib, Khalid The Determinants of Leverage of Listed Companies. International Journal of Business and Social Science. Vol. 3 No. 24. Diakses 05 Januari Brigham,F. Eugene dan Houston,F. Joel. (2010). Dasar Dasar Manajemen Keuangan : Essentials Of Financial Management. Jakarta: Penerbit Salemba Empat. Damayanti. (2013). Pengaruh Struktur Aktiva, Ukuran Perusahaan, Peluang Bertumbuh Dan Profitabilitas Terhadap Struktur Modal (Studi Pada Perusahaan Yang Terdaftar Di Bursa Efek Indonesia). Jurnal Perspektif Bisnis Universitas Lampung, Vol.1, No. 1, Juni Sari, Devi Verena dan Haryanto, A. Mulyo (2013). Pengaruh Profiabilitas, Pertumbuhan Aset, Ukuran Perusahaan, Struktur Aktiva, dan Likuiditas Terhadap Struktur Modal pada Perusahaan Manufaktur di Bursa Efek Indonesia Tahun Jurnal Manajemen, Vol. 2, No. 3. Hlm. 1. Liwang, Florencia Paramitha, Semantik. (2011). Faktor-Faktor yang Mempengaruhi Struktur Modal Serta Pengaruhnya Terhadap Harga Saham Pada Perusahaan-Perusahaan yang Tergabung Dalam LQ45 Periode Tahun Harahap, Sofyan Syafri Analisis Kritis atas Laporan Keuangan. Jakarta: PT. Raja Grafindo Persada Hartoyo. (2014). Faktor-Faktor yang Mempengaruhi Struktur Modal Perusahaan Tekstil dan Garmen Di BEI. Accounting Analysis Journal. Vol. 3 No. 2, April Husnan, Suad. (2004). Manajemen Keuangan Teori dan Penerapan (keputusan Jangka Pendek), Edisi keempat. Yogyakarta: Penerbit BPFE. Jogiyanto, Hartono. (2000). Teori Portofolio dan Analisis Investasi, Edisi Kedua. Yogyakarta: BPFE UGM. Kasmir. (2012). Analisis Laporan Keuangan. Jakarta: PT. Raja Grafindo Persada. Machfoedz, Mahmud. (2005). Kewirausahaan : Metode, Manajemen, dan Implementasi. Yogyakarta : Penerbit BPFE. Munawir. (2010). Analisis Laporan Keuangan. Edisi Keempat. Yogyakarta: Penerbit Liberty. Sartono, Agus. (2010). Manajemen Keuangan Teori dan Aplikasi Edisi Empat. Yogyakarta: Penerbit BPFE. Seftianne dan Handayani, Ratih. (2011). Faktor-Faktor Yang Mempengaruhi Struktur Modal Pada Perusahaan Publik Sektor Manufaktur. Jurnal Bisnis dan Akuntansi. Vol. 13, No.1. Sitanggang, J. P. (2013). Manajemen Keuangan Perusahaan Lanjutan. Jakarta: Penerbit Mitra Wacana Media. Sjahrial, Dermawan. (2007). Manajemen Keuangan. Jakarta: Penerbit Mitra Wacana Media. Sugiyono (2010). Metode Penelitian Bisnis. Bandung: Penerbit CV.Alfabeta. Sundjaja, Ridwan. (2002). Pengantar Manajemen Keuangan. Jakarta: Penerbit Prenhallindo. Syamsudin, Lukman. (2009). Manajemen Keuangan Perusahaan. Jakarta : Penerbit PT Raja Grafindo Persada. Ticoalu, Rouben Meldrick Andrew. (2013). Faktor-Faktor Yang Mempengaruhi Struktur Modal di Sektor Agriculture yang Terdaftar di Bursa Efek Indonesia Periode Jurnal Ilmiah Mahasiswa Universitas Surabaya. Vol. 2, No. 2. Furi, Vina Ratna dan Saifudin. (2012). Faktor-Faktor Yang Mempengaruhi Struktur Modal (Studi Empiris Pada Perusahaan Manufaktur Yang Terdaftar Di BEI Tahun ). Juraksi, Vol. 1, No. 2, Februari Weston J. Fred dan Eugene F. Brigham. (2005). Manajemen Keuangan. Jakarta: Penerbit Erlangga The International Journal of Social Sciences and Humanities Invention, vol.4, Issue 9, September, 2017