ARTÍCULO
TITULO

The Role of Business Risk and Non Debt Tax Shields to Debt to Equity Ratio on Pharmacy Listed Companies in Indonesia

Suratno Suratno    
Syahril Djaddan    
Imam Ghozali    

Resumen

The purpose of this study was to analyze the effect of interest earned time and business risk effect on debt to equity ratio and to determine the role of non-debt tax shields moderate the relationship between time interests earned and business risk on capital structure. There are 12 companies of pharmaceutical industries in Indonesia and the ones that meet the requirements are only 9 pharmaceutical industries. The data are analyzed and interpreted using the analysis tool of Struktur Equation Modeling with WarpPLS 5.0. Program is Variance or component based SEM is used to analyze hypotheses. The study concluded that Time Interest Earned and Interest Earned Time interaction with Tax Debt Non Shields no significant effect on Debt to Equity Ratio and to variable Business Risk and Business Risk Interactions with non-debt tax Shields significant effect on Debt to Equity Ratio. The results of this study are non-debt tax shields strengthen the relationship between the business risk of the debt to equity ratio which correspond to trade off theory, where the company made tax savings by using additional debt invested on fixed assets when the level of business risk is low and does not use additional debt when the company?s business is high-risk.Keywords:  Debt to Equity Ratio, Time Interest Earned, Business Risk, Non Debt Tax Shields.JEL Classifications: G31, H25, H63

 Artículos similares

       
 
Muhammad Iqbal Fasa,(Universitas Islam Negeri Raden IntanIndonesia)Loni Hendri,(Bersama InstituteIndonesia)Suharto Suharto,(Universitas Islam Negeri Raden IntanIndonesia)     Pág. 76 - 85
This research aims to find credit restructuring "black hole," then draw some steps banks should do to strengthen its performance and its role as financial intermediary in COVID-19 condition. The descriptive-critical analysis is used in this paper. The an... ver más

 
Lukman Ayinde Olorogun,Kursat Yalciner,Abdulla Sultan Al Jaberi     Pág. 148 - 155
Redefining the variables of macroeconomics requires the evaluation of the vital role the healthcare industry plays as an economic agent. The pharmaceutical industry constitutes a vital part of the healthcare industry. In this study, the evaluation of the... ver más

 
Anastasios Pappas and Ioannis Kostakis    
This study presents empirical evidence about the determinants of long-term government bond yields for 19 economies of the European Monetary Union (EMU) over the period 1995?2018 within a multivariate panel framework. The fixed effects estimators reveal t... ver más

 
Hussein Salameh,Ahmed Alodadi,Khaled Alzubi     Pág. 262 - 267
Key studies have identified the need to study the role of sovereign debt on economic growth, particularly in relation to countries with heavily oil-based status economies. This paper applies a panel vector autoregressive approach to examine the impact of... ver más

 
Eli Marnia Henira,Raja Masbar,Chenny Seftarita     Pág. 80 - 95
Inflation is generally seen as a monetary phenomenon whose effective control is through the management of the money supply, interest rates, and exchange rates. Another opinion views inflation as a fiscal phenomenon that is controlled through the effectiv... ver más