ROS, DR and DSCR

Abstract

Every business wants to grow and succeed. The success of a company’s business will cause the company to have the trust of the creditor to get a loan so that the company’s management will make decisions about the capital structure that will be run by the company. Furthermore, changes in capital structure will affect the company’s ability to pay debts. The purpose of this study was to determine the effect of efficiency (ROS) on capital structure (DR) and its impact on debt coverage (DSCR). The data used is quantitative data with causal associative methods. The study lays out descriptive statistical results, correlation and determination coefficients, significance tests, and regressions. This study used secondary data on the financial statements of Health Sector Companies listed on the Indonesia Stock Exchange for 2017 - 2020. The results showed that efficiency had a positive and very weak relationship with the capital structure. Efficiency has no significant effect on the capital structure. The capital structure has a negative and very weak relationship to debt coverage. The capital structure has no significant effect on debt coverage. Finally, the conclusion is that the higher profit gives the company the opportunity to obtain investment through debt. However, debt leads to narrower debt coverage. Companies with small profits did not choose debts as their source of funding and did not face debt coverage issues.

Keywords: profit, capital structure, debt coverage