The Influence Of Growth Opportunity And Return On Equity (ROE) Toward Company Capital Structure

This study aims to determine the effect of growth opportunity and return on equity the capital structure of the automotive sub-sector companies and components listed on the Indonesia Stock Exchange (IDX) in 2014-2018. The sample used in this study is the automotive sub-sector companies listed on the Indonesia Stock Exchange (IDX) in 2014-2018. The sampling technique used was purposive sampling method and obtained 8 companies. The data collected is secondary data with the method of documentation through www.idx.com in the form of a company annual report. The analytical tool used for hypothesis testing is SPPS 20. The results of this study are (1) Growth opportunity does not have a significant effect on the company's capital structure. (2) Return on equity has a significant effect on the company's capital structure.


INTRODUCTION
The development of financial management is now so dynamic. This happens along with the high level of business activities and human life in the current era of globalization. This condition causes a variety of discussions about the science of financial management to be so interesting for managers, bureaucrats, and academics and researchers in general are no exception.
The national automotive industry is one of the drivers of the Indonesian economy. The automotive industry has a business chain starting from component manufacturing, vehicle manufacturing itself, distribution network and after-sales service, both formal and public workshops, including parts sales networks throughout Indonesia. In making innovations, funds that are not insignificant are needed, so that to meet these sources of funds, the automotive industry can raise funds from internal and external sources. This is because automotive companies have favorable prospects where transportation is one of the most important needs of the community.
One of the factors that makes a company competitive in the long run is because of the strength of its capital structure. So the decision on the sources of funds used to strengthen the capital structure of a company cannot be seen as a simple decision but has strong implications for what will happen in the future.
Factors that influence fluctuations in capital structure can come from internal and external. The internal factors include depreciation reserves, profits not shared, or retained earnings, etc.
Meanwhile, external factors. This external funding source is obtained by issuing bonds and various other long-term debt.
Companies with high growth opportunities tend to keep their debt ratios at a low level, this is done to maintain their credit capacity in difficult times. This means that the higher the growth of the company, the lower the debt used. . Thus companies with low growth opportunities will use more long-term debt.
Growth Opportunity for every company is different, this causes different spending decisions taken by financial managers. Companies with high growth opportunity tend to spend investment expenditure with their own capital to avoid the problem of underinvestment, namely not implementing all investment projects that are positive by the company manager (Chen, 2004).
Measuring the net profit gained from using assets. In other words, the higher this ratio, the better the productivity of assets in obtaining net profits.
The company will not be separated from debt in meeting operational financing. Companies that have a large enough debt always expect a large profit as well, because in theory increasing debt will certainly also stimulate an increase in profits from the company.
The greater the level of ability of a company in the greater the rate of return on the net profit of automotive companies and components, it will cause the position of the company's capital owner to be stronger According to Irham Fahmi (2015: 82) This ratio examines the extent to which a company uses its resources to be able to provide a return on equity. (Irham Fahmi, 2015: 82) From the above definition, it can be concluded that ROE is one of the factors that influence the fluctuation of a company's capital structure. ROE also serves to determine the company's profit from the rate of return through long-term debt.
According to Hasni Yusrianti (2013) explains that Return On Equity has a significant effect on Capital Structure.
According to Arma Pertiwi (2014) explains that Return On Equity has a significant effect on Capital Structure.
According to Mochamad Yahdi Khairin (2014) explains that Growth Opportunity has a significant effect on the positive direction of the Capital Structure.
Based on the description of previous research evidence and problems in the background above, researchers are interested in conducting research with the title: "the influence of growth opportunity and return on equity on the capital structure of the company in the automotive sub sector and components listed on the Indonesia stock exchange in 2014-2018 ". Formulation of the problem 1. Does Return On Equity (ROE) have a significant effect on the capital structure of automotive sub-sector companies and components listed on the Indonesia Stock Exchange? 2. Does Return On Equity (ROE) have a significant effect on the capital structure of automotive sub-sector companies and components listed on the Indonesia Stock Exchange? 3. Does Growth Opportunity and Return On Equity simultaneously have a significant effect on the capital structure of the automotive sub-sector companies and components listed on the Indonesia Stock Exchange in 2014-2018?

Research purposes
According to the problem formulation above, the objectives of this study are as follows: Based on these criteria, researchers have determined that there are 8 automotive sub-sector and component companies that meet these criteria. The 8 companies will be used as a research sample with 40 observations. Table 1.

Descriptive Statistics Testing Results
Source: results of data processing in SPSS 20 Table 1 presents statistics from the study sample that illustrates the minimum, maximum, average and standard deviation of each variable. N value indicates the amount of data used in this study, namely the length of the year period according to the data included in the criteria.
The normality test results show the point spreads around the diagonal line and follows the direction of the diagonal line, then the regression model meets the normality assumption.  The results of the normality test show table 2 can be seen in the column of significance kolmogorov-smirnov Asymp.Sig (2-tailed) values show above 0.05. That means that the regression model is said to be normal. Table 3.

Multicollinearity Test Results
Source: results of data processing in SPSS 20 Based on the table above, it can be seen that all independent variables, namely Growth Opportunity and Return On Equity (ROE) have a tolerance value greater than 0.10 and a VIF value smaller than 10. This means that there is no multicollinearity, so good data is used in the regression model.

Figure 3 Heteroscedasticity Test Results
Source: results of data processing in SPSS 20 Based on the picture above, it can be seen that the residual data in both regression models spreads above and below the 0 point and does not form a specific pattern. So it can be concluded that in this study there were no symptoms of heteroscedasticity. Table 4.

Autocorrelation Test Results
Source: results of data processing in SPSS 20 Based on table 4. above shows that the value of Durbin-Watson is 1.944. This means that in this study the number is located between -2 and +2 which means there is no autocorrelation in the regression model used. increase in the value of Growth Opportunity increases by one unit, then it will be followed by a Capital Structure value of 2.007. Regression Coefficient (X2) of 0.033 means that every ROE addition of one unit will be followed by a Capital Structure value of 0.033. Table 6.

Results of the Determination Coefficient Analysis
Source: results of data processing in SPSS 20 Based on table 6 above produces an adjusted R square value of 0.365 (36.5%). This R square value indicates the contribution of the independent variable to the dependent variable is 36.5%, while the remaining 63.5% is influenced by other variables not included with the studied variables such as Liquidity, Firm Size, Business Risk and others. Table 7. t-test Source: results of data processing in SPSS 20 Based on the results of the above calculation, it is known that in the first equation, the value of t (t-count) obtained in regression shows the effect of partially independent variables on the dependent variable. Regression results are known that the magnitude of the value of the Growth Opportunity variable is 0.821 while the value of the table is 2.0261 because tcount <ttable or a significance level of 0.417> 0.05 then H1 is rejected, which means Growth Opportunity has no significant effect on the company's capital structure.
From the regression results it is known that the value of the t-count variable Return On Equity (ROE) is 3.973 while the value of t-table is 2.0261 because tcount> t-table or a significance level of 0,000 <0.05 then H2 is accepted, which means Return on Equity (ROE) has a significant effect on the company's capital structure of the company.