Factors of Capital Structure and Working Capital Management that Affect Profitability of Companies in the Property and Construction Industry Listed in the Stock Exchange of Thailand

Abstract

The objective of this study is to investigate the factors of capital structure and working capital management that affect the profitability of companies in the property and construction industry listed on the Stock Exchange of Thailand. The sample group in this study consists of the property and construction industry, with data collected from financial statements, annual reports (Form 56-1), and notes to financial statements annually from 2020-2022. The sample used in the study includes a total of 92 companies. The study employs basic data analysis techniques, including descriptive statistics, Pearson's correlation coefficient, and multiple regression analysis. The findings reveal that: 1) Capital structure factors that positively affect profitability include: 1.1) company size, which has a positive effect on net profit margin, gross profit margin, return on equity, and return on assets; 1.2) debt-to-equity ratio, which has a positive effect on return on equity and return on assets; and 1.3) liquidity, which has a positive effect on return on assets. 2) Working capital management factors that positively affect profitability include: 2.1) cash conversion cycle, which has a positive effect on net profit margin and gross profit margin; and 2.2) gross working capital turnover ratio, which has a positive effect on net profit margin, gross profit margin, return on equity, and return on assets. However, sales growth does not significantly affect net profit margin, gross profit margin, return on equity, or return on assets.