Rethinking Debt in Defense Firms: Why Profitability BeatsLiquidity In Bandung, 2017–2024

  • Authors

    https://doi.org/10.14419/8s5k8m37

    Received date: July 15, 2025

    Accepted date: August 17, 2025

    Published date: August 25, 2025

  • Capital Structure; Current Ratio; Debt-to-equity Ratio; Liquidity; Profitability

  • Abstract

    This study aims to analyze the effects of profitability and liquidity on capital structure in the defense industry in Bandung during the period 2017-2024. Using a descriptive-verification quantitative approach, this study uses secondary data derived from the company's financial statements. Profitability is proxied by the net profit margin (NPM), liquidity by the current ratio (CR), and capital structure by the debt-to-equity ratio (DER). The results show that neither profitability nor liquidity significantly affects capital structure, either partially or simultaneously. However, NPM shows potential as a reliable indicator to manage capital structure in accordance with industry standards. These results suggest that increasing internal profitability can be a key strategy for the defense industry in Bandung in strengthening the sustainability of its capital structure.

    Author Biography

    • Komang Ariyanto, Department of Sociology, Faculty of Social and Political Sciences, University of Lampung, Bandar Lampung, Indonesia and Department of Rural Sociology, Faculty of Human Ecology, IPB University, Bogor, Indonesia

      Department of Sociology, University of Lampung, Indonesia 

      Department of Rural Sociology, IPB University, Indonesia 

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    Rapini , T. ., Arip, Y. ., Kristiyana, N. ., Farida, U. ., Hartono, S. . ., Putro, R. L. ., & Ariyanto, K. . (2025). Rethinking Debt in Defense Firms: Why Profitability BeatsLiquidity In Bandung, 2017–2024. International Journal of Accounting and Economics Studies, 12(4), 668-680. https://doi.org/10.14419/8s5k8m37