Is Firm Size Able to Moderate Capital Structure on Profitability?

Research Aims: This study examines the ability of firm size to moderate capital structure on profitability at the Healthcare companies listed on the Indonesia Stock Exchange 2020-2024. The health industry is seen as a sector that is very crucial in maintaining the quality of life and productivity of the community, so it is important to know the factors that can influence its profitability, as a variable that reflects the company's success in a given period. Design/methodology/approach: The study was carried out using a quantitative-causality approach. The analytical method used to test the hypotheses is moderated regression analysis. Research Findings: This study indicate that firm size is able to moderate capital structure on profitability, although capital structure is proven to have no effect on profitability. Theoretical Contribution/Originality: The theoretical contribution is the development of a middle-range theory regarding the ability of company size to moderate capital structure on profitability, which is based on a trade-off theoretical framework. This paper offers useful insights for the owners, investor, managers, and lending institutions based on empirical evidence. Research limitation and implication: This study only uses one component of capital structure, namely debt, in its measurement. Capital structure is measured using the debt to asset ratio indicator. This may have implications for results that are unable to support the trade-off theory, that capital structure is not an explanatory factor for profitability.