Financial Sustainability in Basic Materials Sector: The Role of Firm Performance on Capital Structure

An important aspect of company's sustainability strategy is capital structure. Capital structure shows how far the companies manage their operations by using debt rather than capital. This study aims to explain the impact of business risk and asset structure on capital structure with firm performance as a moderator in basic materials sector companies listed on the Indonesia Stock Exchange for 2019 to 2023. In this study, the author used purposive sampling that resulted in a total research sample of 35 companies from a
population of 103 companies. This data uses moderated regression analysis techniques. It is processed using the Statistical Product and Service Solution (SPSS) version 26 program. This study showed that business risk and asset structure do not affect capital structure. While firm performance moderated the business risk, there still cannot effect the business risk on capital structure. However, while firm performance is moderated asset structure, there has an effect on capital structure in the basic materials sector on the Indonesia Stock Exchange. Based on the research results, several suggestions for future researchers are adding other independent variables, replacing moderating variables, and expanding the research sample where predicted to obtain better research findings.