Profitability and Liquidity as Determinants of Transport-Logistics Firms’ Capital Structure

Abstract

Transportation and logistics companies require substantial funding, as their business operations rely heavily on assets, fleets, and operating expenses. Consequently, decisions regarding the mix of debt and equity financing must be carefully weighed to ensure the company maintains healthy operations. This study aims to examine the impact of profitability and liquidity on the capital structure of transportation and logistics companies listed on the Indonesia Stock Exchange in 2024. A quantitative approach was employed, utilizing secondary data obtained from the companies' annual financial reports via documentation techniques. Profitability was measured using Return on Assets, liquidity using the Current Ratio, and capital structure using the Debt to Equity Ratio. The data were analyzed using multiple linear regression with the aid of SPSS. The results indicate that companies with a greater capacity to generate profit tend to utilize lower levels of debt. A similar trend was observed among companies with stronger liquidity positions, as they are generally better able to meet their funding requirements through internal sources. Overall, profitability and liquidity influence corporate decisions regarding capital structure. These findings suggest that companies tend to prioritize internal funds over debt financing. Future research is recommended to utilize a longer observation period and consider additional factors, such as firm size, asset structure, and business risk.