scholarly journals Influence of Working Capital Management and Policy to Profitability of Retail Trading Sector in Indonesia

2021 ◽  
Vol 04 (12) ◽  
Author(s):  
Eric Tjandra ◽  
Keyword(s):  
Panel Data ◽  
Investment Policy ◽  
Working Capital ◽  
Financing Policy ◽  
Working Capital Management ◽  
Cash Conversion Cycle ◽  
Panel Data Regression ◽  
Data Regression ◽  
Retail Trading ◽  
Tax Depreciation

Working Capital (WC) is an important aspect of any firms because of its correlation to risk (liquidity) and return (profitability). This research examines the influence of WC Management and Policy (WCMP) to profitability of 21 listed retail trading sector firms in Indonesia from 2011-2020 using panel data regression. In this research, WC Management (WCM) is measured by Cash Conversion Cycle (CCC) and its components which are Days Sales Outstanding (DSO), Days Inventory Outstanding, and Days Payable Outstanding (DPO); WC Policy is measured current assets divided by total assets or referred to as WC Investment Policy (WCIP) and current liabilities divided by total assets or referred to as WC Financing Policy (WCFP); and profitability is measured by Earnings Before Interest, Tax, Depreciation, and Amortization Margin (EBITDAM). The results show that firms can increase EBITDAM by shortening CCC, primarily through shortening DIO and lengthening DPO. Further, firms may improve EBITDAM by adopting a conservative WC Policy instead of an aggressive one, which means having higher current assets and lower current liabilities with respect to total assets.

scholarly journals The Relationship between Working Capital Management and Profitability of Bumiputera-Controlled Companies in Malaysia

2018 ◽  
Vol 2 (3) ◽  
pp. 24-34
Author(s):  
Fairuz Sofia Kaharuddin ◽  
Ahmad Rizal Mazlan
Keyword(s):  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Trade Off ◽  
Cash Conversion Cycle ◽  
Conversion Period ◽  
Panel Data Regression ◽  
Data Regression ◽  
Collection Period ◽  
The Relationship

This study investigated the relationship between working capital management and profitability of 94 listed Bumiputera-controlled companies in Malaysia for 2006 until 2012. The underlying theory is the trade-off theory of working capital and cash conversion cycle, and its components are used as measures for working capital management. Findings of the panel data regression reveal that inventory conversion period and receivable collection period are significantly negatively correlated to profitability. This suggests that the shorter the period, the higher the profitability of Bumiputera-controlled companies tends to be. However, the cash conversion cycle is significantly and positively correlated to profitability, suggesting that the longer the cash conversion period, the higher the profitability. The payable collection period is not significantly correlated to profitability. The findings of this study assert that in general, Bumiputera-controlled companies are relatively less efficient in its working capital management, as far as the comparison to previous related studies is concerned.

scholarly journals Impact of Working Capital and Leverage on Profitability: A Comparison between Indonesia Ulama Council Fatwa and AAOIFI Sharia Standards

2021 ◽  
Vol 6 (1) ◽  
pp. 39
Author(s):  
Akhmad - Sultoni ◽  
Rahmat Mulyana ◽  
Saiful Anwar
Keyword(s):  
Panel Data ◽  
Empirical Evidence ◽  
Research Paper ◽  
Stock Index ◽  
Working Capital ◽  
Return On Assets ◽  
Cash Conversion Cycle ◽  
Panel Data Regression ◽  
Data Regression ◽  
The Impact

Purpose – This study aims to provide empirical evidence regarding the restrictions on the sharia stock criteria, by observing the impact of working capital and leverage on the profitability of companies listed in Indonesia Sharia Stock Index. There are some differences between Indonesia Ulama Council’s fatwa and AAOIFI sharia standards regarding the restrictions on the sharia stocks, particularly on the riba based leverage compared to the total assets of the companies regarded as having sharia stocks. The objective of this paper is to compare and analyze which restrictions serves companies better.Design/methodology/approach – The research was done to companies listed in Indonesia Sharia Stock Index from 2012 until 2018. Panel data regression was applied to analyze the significance of the result. For comparison purpose of the fatwa and the AAOIFI sharia standards, samples were divided into three different groups based on the debt to assets ratio as an indicator of the riba based leverage (≤30%, 30%-45% and>45%). Variables of cash conversion cycle and debt to assets ratio are used to measure the impact of the working capital and leverage on the return on assets as indicator or profitability.Findings – The result suggests that there are differences in the impact of working capital and leverage on the profitability for the three groups of leverage. In favor of the AAOIFI sharia standards, the result of this study shows that in the group where the leverage is 30% at maximum, the profitability is not affected by the working capital and leverage of the company. Meanwhile, in the group where the leverage is more than 30%, the impact of working capital and leverage on the profitability of the company is found to be significant.Research limitations/implications – This study is limited to the companies listed in Indonesia Sharia Stock Index, with variables of cash conversion, debt to assets ratio and return on assets.Practical implications – This study provide an empirical evidence that can be used to revisit the restrictions applied by Indonesia Ulama Council regarding the sharia stocks.Originality/value – To the best of authors’ knowledge, this paper provides important findings in the sharia finance dynamic in Indonesia.Keyword working capital, leverage, profitability, sharia stocks.Paper type research paper

scholarly journals Conservative Working Capital Policy: Can it Increase Profitability and Sustainable Growth Rate?

2021 ◽  
Vol 12 (3) ◽  
pp. 5630-5637
Author(s):  
Sunardi Sunardi Et. al.
Keyword(s):  
Growth Rate ◽  
Manufacturing Sector ◽  
Sustainable Growth ◽  
Working Capital ◽  
Financing Policy ◽  
Panel Data Regression ◽  
Data Regression ◽  
Sustainable Growth Rate ◽  
Investment And Financing ◽  
Positive Effect

The objective of this study is to investigate the effect of conservative working capital policy on profitability and examine the effect of conservative working capital policy on sustainable growth mediated by profitability in the manufacturing sector in Indonesia. This study involves 133 manufacturing firms in Indonesia during the 2013-2018 period. Data are analyzed using panel data regression with random effects estimation models. The result of this study showed that conservative working capital policy, both investment and financing policy, has proven to have a positive effect on sustainable growth rate. Besides, this study also proved that profitability has a positive effect on SGR. Furthermore, there was the effect of conservative working capital policies on the level of sustainable growth through profitability. This study not only contributes to expanding knowledge about the relationship between working capital policies, profitability and sustainable growth rates, but also has relevant implications for firm managers to improve firm performance to be able to grow sustainably

scholarly journals Is working capital management able to increase sustainable growth through asset utilization?

2020 ◽  
Vol 17 (2) ◽  
pp. 136-146
Author(s):  
Yekti Kinasih ◽  
Rambu Dorkas ◽  
Supramono Supramono
Keyword(s):  
Stock Exchange ◽  
Manufacturing Firms ◽  
Sustainable Growth ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Panel Data Regression ◽  
Data Regression ◽  
Strategic Role ◽  
The Relationship

Working capital management has a strategic role to maintain a balance between liquidity and profitability so that firms have greater opportunities to operate sustainably. This study mainly aims to investigate the ability of working capital management to increase sustainable growth through asset utilization. We ran panel data regression on manufacturing firms listed in the Indonesian Stock Exchange for the years of 2010-2017 as our sample. By controlling for leverage, sales growth, and firm size, our empirical results demonstrate that working capital management negatively affects firms' asset utilization. Furthermore, the study also finds that asset utilization positively affects sustainable growth. Finally, we empirically show that asset utilization mediates the relationship between working capital management and sustainable growth. The findings imply that if Indonesian manufacturing firms manage to have efficient working capital management, they are more likely to utilize their assets efficiently which, in turn, will increase their growth optimally, without causing problems to their cash.

scholarly journals Dampak kebijakan modal kerja, leverage, dan aset perusahaan terhadap profitabilitas perusahaan yang terdaftar di bursa efek in indonesia periode 2010-2012

2017 ◽  
Vol 20 (1) ◽  
Author(s):  
Agus Zainul Arifin ◽  
Prayogo Indrayang
Keyword(s):  
Stock Exchange ◽  
Random Effect ◽  
Sampling Technique ◽  
Financial Assets ◽  
Working Capital ◽  
Cash Conversion Cycle ◽  
Panel Data Regression ◽  
Data Regression ◽  
Asset Size ◽  
The Relationship

Objective of this study was to determine the relationship between working capital policy with proxy Cash Conversion Cycle (CCC), Leverage, company size, and Financial Assets, as independentvariables, and profitability as the dependent variable on the non-financial companies listed in Indonesia Stock Exchange period 2010-2012. To examine this relationship, using panel data regression. Sampling method was non-probability sampling with purposive sampling technique. The results of the analysis of the evidence obtained in the form of regression model used is Random Effect. Partial test effect prove that the policy of working capital, leverage, asset size, and Financial Assets no effect on profitability. The test results together prove significant effect.

scholarly journals Dinamika Bisnis Selama Pandemi Covid-19 pada Tingkat Likuiditas Perusahaan Pertanian dan Consumer Goods di Indonesia

2021 ◽  
Vol 4 (1) ◽  
pp. 97-120
Author(s):  
Arsheila Primadita ◽  
Nadia Asandimitra Haryono
Keyword(s):  
Regression Analysis ◽  
Panel Data ◽  
Firm Size ◽  
Consumer Goods ◽  
Debt Ratio ◽  
Working Capital ◽  
Purposive Sampling ◽  
Panel Data Regression ◽  
Data Regression ◽  
Inventory Turnover

The purpose of this research is to empirically prove the effect of firm size, receivable turnover, debt ratio, inventory turnover, and working capital turnover on liquidity as well as changes during the covid-19 pandemic. The object of this research is taken from the agricultural sector and consumer goods which enlisted on IDX period quarterly IV 2019, quarterly I-II 2020. This type of research is quantitative and used secondary data which consists of a quarterly financial report on IDX. The samples are obtained by using the purposive sampling method and produced 75 samples of industry. The research uses the panel data regression analysis method. Based on the result of panel data regression analysis indicated that only the debt ratio has a negative significant relation to liquidity. Firm size, receivable turnover, inventory turnover and working capital turnover aren’t significant because increase or decrease in these variables do not affect the level of liquidity. During the covid-19 pandemic, there was no change in the relationship between each independent variable on liquidity.Tujuan dari penelitian ini adalah untuk membuktikan secara empiris pengaruh ukuran perusahaan, perputaran piutang, rasio hutang, perputaran persediaan, dan perputaran modal kerja terhadap likuiditas serta perubahan selama pandemi covid-19. Objek penelitian ini diambil dari sektor pertanian dan consumer goods yang terdaftar di BEI periode triwulan IV 2019 sampai dengan triwulan I-II 2020. Jenis penelitian ini adalah kuantitatif dan menggunakan data sekunder yang terdiri dari laporan keuangan triwulanan di BEI. Pengambilan sampel dilakukan dengan menggunakan metode purposive sampling dan menghasilkan 75 sampel perusahaan. Metode yang digunakan dalam penelitian ini adalah metode analisis regresi data panel. Hasil analisis menunjukkan bahwa hanya rasio hutang yang berpengaruh signifikan negatif terhadap likuiditas. Ukuran perusahaan, perputaran piutang, perputaran persediaan dan perputaran modal kerja tidak signifikan karena kenaikan atau penurunan variabel tersebut tidak mempengaruhi tingkat likuiditas. Selama pandemi Covid-19, tidak ada perubahan hubungan antara masing-masing variabel independen terhadap likuiditas.

scholarly journals Apakah Profitabilitas Memediasi Pengaruh Manajemen Modal Kerja terhadap Nilai Perusahaan?

2021 ◽  
Vol 3 (2) ◽  
pp. 103-114
Author(s):  
Evan Yulandreano ◽  
Apriani Dorkas Rambu Atahau ◽  
Imanuel Madea Sakti
Keyword(s):  
Firm Value ◽  
Positive Impact ◽  
Stock Exchange ◽  
Capital Management ◽  
Working Capital ◽  
Return On Assets ◽  
Working Capital Management ◽  
Cash Conversion Cycle ◽  
Company Value ◽  
Panel Data Regression

This study aims to examine the effect of working capital management on firm value with profitability as a mediating variable. This study uses a sample of 18 retail companies listed on the Indonesia Stock Exchange from 2014 to 2018. Working capital management is measured by Cash Conversion Cycle (CCC), profitability is measured by Return on Assets (ROA), and company value is measured by Tobins Q. Panel data regression is conducted to test the direct effect, followed by the Sobel test to test for the indirect effect. The results showed that working capital management increased firm value directly and indirectly through profitability. Working capital management with a shorter cycle results in greater profitability, thus driving firm value. The implication of this research is that retail companies are expected to shorten the company's cash cycle so that it has a positive impact on the company's profitability and value. DOI: https://doi.org/10.26905/afr.v3i2.5452

scholarly journals Pengaruh Inflasi, Kurs Dan Modal Kerja Terhadap Laba Perusahaan Perbankan

2020 ◽  
Vol 2 (1) ◽  
pp. 261
Author(s):  
Silvia Meiliana ◽  
Nuryasman M. N.
Keyword(s):  
Panel Data ◽  
Exchange Rates ◽  
Sampling Method ◽  
Working Capital ◽  
Purposive Sampling ◽  
Analysis Techniques ◽  
Panel Data Regression ◽  
Data Regression ◽  
Negative Effect ◽  
Positive Effect

The purpose of this research is to examine whether (1) inflation effect to banking profits (2) exchange rates effect to banking profits (3) working capital effects to banking profits. Data collection was done by purposive sampling method, so that 38 banking companies were collected. Data analysis techniques using panel data regression analysis techniques. Data is processed using Eviews 10.0. The results of this study indicate that inflation and working capital have a positive effect to profit. Meanwhile, the exchange rate has a negative effect to profit. Penelitian ini bertujuan untuk menguji apakah (1) inflasi berpengaruh terhadap laba perbankan (2) kurs berpengaruh terhadap laba perbankan (3) modal kerja berpengaruh terhadap laba perbankan. Data diambil dengan metode purposive sampling, sehingga terkumpul 38 perusahaan perbankan. Teknik analisis data menggunakan teknik analisis regresi data panel. Data diolah dengan menggunakan Eviews 10.0. Hasil penelitian ini menunjukkan bahwa  inflasi dan modal kerja mempunyai pengaruh positif terhadap laba. Sedangkan, kurs mempunyai pengaruh negatif terhadap laba.

Analysis of the Effect of Working Capital Management on Profitability of the Firm: Evidence from Indian Steel Industry

2018 ◽  
Vol 14 (1-2) ◽  
pp. 32-38
Author(s):  
Pinku Paul ◽  
Paroma Mitra
Keyword(s):  
Steel Industry ◽  
Financial Health ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Turnover Ratio ◽  
Panel Data Regression ◽  
Data Regression ◽  
The Impact ◽  
Firm Evidence

Working capital is one of the important measures of a firm’s efficiency and represents the total liquid assets available with a firm. It reflects a firms’ ability to meet day-to-day operating expenses and also acts as an indicator of a firm’s short-term financial health. So a firm has to plan the effective utilisation of its working capital in order to maintain equilibrium between liquidity and profitability of the business. Therefore, the present article tries to examine the impact of working capital management on profitability of the firms of Indian steel industry. The study has taken into consideration four independent variables, that is, Current ratio, Quick ratio, Debtors turnover ratio and Finished goods turnover ratio which act as the indicators of working capital use in the industry. Return on total assets represents the profitability of the industry and acts as a dependent variable to develop an empirical model in order to establish relationship between working capital management and profitability of the steel industry in India by using panel data regression. The period of study is 17 years, that is, 2000–2016. The result of the study indicates that the impact of working capital management on profitability of the firms of Indian steel industry has been significant.

scholarly journals Packages or systems? Working capital management and financial performance among listed U.S. manufacturing firms

2020 ◽  
Author(s):  
Hakim Lyngstadaas
Keyword(s):  
Financial Performance ◽  
System Approach ◽  
Qualitative Comparative Analysis ◽  
Manufacturing Firms ◽  
Capital Management ◽  
Working Capital ◽  
Data Set ◽  
Working Capital Management ◽  
Panel Data Regression ◽  
Data Regression

AbstractThis study examines how working capital management packages (WCMPs) can lead to higher financial performance. This is done by exploring the formation, importance, and systematic interdependencies within and between WCMPs. The data set consists of 589 U.S. listed manufacturing firms that are being studied during the fiscal period 2012–2019. WCMPs are studied from both a package and a system approach. This is done by combining fuzzy set qualitative comparative analysis and panel data regression. In all, 11 effective WCMPs are found to be associated with high financial performance. Six of them constitute unique and empirically important packages and are also identified as systems. The findings can have consequences for managers and practitioners, as the study creates an explicit link between a firm’s working capital management and financial performance.

Sign in / Sign up

Export Citation Format

Share Document