Universitas Bhayangkara Jakarta Raya

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Machdar, Nera Marinda (2025) Total Risk, Capital Structure, and Profitability Analysis: The Impact on Corporate Sustainability Mediated by Firm Performance. International Journal of Economics and Accounting, 2 (1). pp. 202-221.

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Abstract

This research aims to analyze the relationships among total risk, capital structure, and profitability, and their impact on corporate sustainability, with firm performance acting as a mediator. Corporate sustainability has become increasingly important in today’s competitive and dynamic business environment. A literature review indicates that well-managed total risk can enhance firm performance, while an optimal capital structure contributes to higher profitability. In turn, profitability enables companies to invest in innovation and sustainable development. This study identifies a gap in the existing literature, as few studies integrate these three factors within the context of sustainability. By employing a comprehensive analytical approach, this research seeks to provide deeper insights into how total risk, capital structure, and profitability interact to support corporate sustainability. The findings are expected to significantly contribute to financial management practices and sustainable corporate policies.KeywordsTotal Risk, Capital Structure, Profitability, Firm Performance, Corporate Sustainability1.INTRODUCTION Corporate sustainability is increasingly recognised as a fundamental aspect of modern business strategy, necessitated by rapid changes in the global marketplace and rising environmental concerns. In this context, organisations face the dual challenge of achieving profitability while adhering to sustainable practices. This research explores the interconnected relationships between total risk, capital structure, and profitability, and their collective influence on corporate sustainability, with firm performance acting as a mediating factor(Lee, 2024).Total risk encompasses various uncertainties that organisations encounter, including operational, financial, and market-related risks. Effective management of these risks is crucial for the long-term viability of a company (Indawati et al., 2024). Firms that successfully identify and mitigate potential risks are more likely to achieve stable performance and protect their resources, enhancing their capacity for sustainable practices. Understanding how total risk interacts with capital structure and profitability is essential for developing comprehensive managerial strategies(Helms et al., 2021).Capital structure, which refers to the mix of debt and equity financing that a company utilizes, plays a significant role in shaping its financial health (Titus, 2023). An optimal capital structure minimizes the cost of capital and maximizes profitability,allowing firms to allocate

Item Type:	Article
Subjects:	Umum > Karya Ilmiah
Depositing User:	Prof Nera Marinda Machdar
Date Deposited:	04 Aug 2025 03:21
Last Modified:	04 Aug 2025 03:21
URI:	http://repository.ubharajaya.ac.id/id/eprint/35730

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