Financial Strategy Analysis for Optimizing Capital Structure: An Empirical Study on Technology

Abstract

This study explores financial strategies for optimizing capital structure among technology companies listed on the Indonesia Stock Exchange (IDX). Utilizing a quantitative approach, data from 100 technology firms over a five-year period were analyzed to understand the relationship between debt-to-equity (D/E) ratios, Return on Assets (ROA), and revenue growth rates. Findings reveal that companies with lower D/E ratios experienced higher profitability and growth flexibility, particularly in research and development (R&D) investments. The analysis supports capital structure theories, including the trade-off and pecking order theories, indicating that technology firms benefit from a capital structure that prioritizes equity over debt to minimize financial risk and enhance growth potential. This study provides practical implications for decision-makers and investors, highlighting the importance of balanced capital strategies for long-term resilience in the high-growth technology sector. Future research could focus on the role of venture capital and other forms of equity financing in optimizing capital structure for emerging market tech firms.