Profitability and Liquidity Effects on Capital Structure: The Moderating Role of Crude Palm Oil Prices in Indonesian Plantation Firms

Retno Damayanti; Felisitas Defung; Ike Purnamasari

doi:10.55927/eajmr.v5i6.200

Authors

Retno Damayanti Mulawarman University
Felisitas Defung Mulawarman University
Ike Purnamasari Mulawarman University

DOI:

https://doi.org/10.55927/eajmr.v5i6.200

Keywords:

Profitability, Liquidity, Capital Structure, Commodity Prices

Abstract

This study examines the effect of profitability and liquidity on capital structure, with crude palm oil (CPO) prices as a moderating variable, in Indonesian palm oil plantation companies listed on the Indonesia Stock Exchange during 2016–2025. Using a quantitative approach and moderated regression analysis (MRA) on 100 firm-year observations from 10 companies, the research evaluates how return on assets (ROA) and current ratio (CR) influence debt-to-asset ratio (DAR) under fluctuating CPO prices. Findings indicate that profitability and liquidity significantly reduce leverage, while CPO prices do not directly affect capital structure but moderate these relationships. The study highlights the combined impact of internal financial performance and external commodity prices on financing decisions, providing implications for managerial strategy and investment risk assessment

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