The Impact of Ratios that are Relevant And Irrelevant To Profitability Affecting The Capital Structure of Companies Listed on The Stock Exchange of Thailand in SET 100 index

Abstract

The purposes of this study were to study the impact of ratios on profitability, which consists of net profit margin, return on assets, and return on equity ratio, that affect the capital structure of companies listed on the Stock Exchange of Thailand in SET100 index and to study the impact of ratios that are irrelevant to profitability, which consists of dividend payout ratio, non-debt tax shield, leverage ratio, and the fixed asset to total assets ratio, affecting the capital structure of companies listed on the Stock Exchange of Thailand in SET100 index. This study was quantitative research, and the data was collected by using secondary data from the financial statements in the 56-1 one report, and the data in the SETSMART database. The total of 222 samples were selected from 74 companies listed on the Stock Exchange of Thailand in the SET100 group during 2018 - 2020, and the data was analyzed by using descriptive statistics and multiple regression analysis methods for the hypothesis testing. The results of the study were as follows: 1) The ratio of return on assets had a negative impact while the return on equity ratio had a positive impact towards the debt to equity ratio. The net profit margin and the return on assets had a negative impact while the return on equity had a positive impact on the debt to total assets ratio. 2) The dividend payout ratio and leverage ratio had a negative impact while the non-debt tax shield had a positive impact on the debt to equity ratio. The leverage ratio had a negative impact on the debt to total asset ratio.