ARCHIVES
VOL. 11, ISSUE 4 (2024)
The effect of receivables turnover, inventory turnover, and payables turnover on company profitability
Authors
Lufthansa Judge Priansyah, Mutiara Tresna Parasetya
Abstract
This research examines the profitability of
manufacturing companies, specifically fast moving consumer goods, and trends
from period to period. Profitability is a crucial financial performance
indicator in this industry that is heavily effect by high competition and
demand. This study analyzes factors affecting company profitability and identifies
profitability trends over time. The findings can assist companies in making
informed decisions to improve future profitability. The research tests the
effect of Accounts Receivable Turnover, Inventory Turnover, and Accounts
Payable Turnover on Company Profitability. The independent variables in this
study are Accounts Receivable Turnover, Inventory Turnover, and Accounts
Payable Turnover. As per Agency Theory, Accounts Receivable Turnover and
Inventory Turnover have a positive effect on Company Profitability. The
population utilized is Fast Moving Consumer Goods companies listed on the
Indonesia Stock Exchange (IDX) from 2017-2021. Samples were determined through
purposive sampling method, resulting in 356 samples from 121 companies tested
in this research using secondary data from Bloomberg. The dependent variable is
measured through Return on Assets. This study employs descriptive statistical
analysis, classic assumption tests consisting of normality test,
multicollinearity test, heteroscedasticity test, and autocorrelation test, as
well as hypothesis testing consisting of Coefficient of Determination Test, T
Statistical Test, and F Statistical Test. Through statistical analysis in this
research, it is known that accounts receivable turnover and inventory turnover
have a positive effect on company profitability as measured by return on assets
(ROA). Meanwhile, accounts payable turnover has proven to significantly
negatively affect company profitability.
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Pages:22-27
How to cite this article:
Lufthansa Judge Priansyah, Mutiara Tresna Parasetya "The effect of receivables turnover, inventory turnover, and payables turnover on company profitability". International Journal of Multidisciplinary Research and Development, Vol 11, Issue 4, 2024, Pages 22-27
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