THE IMPACT OF WORKING CAPITAL MANAGEMENT ON COMPANY’S PROFITABILITY (Study on Hotel, Restaurant, and Tourism Companies Listed on Indonesia Stock Exchange Period 2013-2017)

Abstract

The objective of this research is to investigate the impact of working capital management on the profitability of hotel, restaurant, and tourism companies listed on Indonesia Stock Exchange for the period of 2013-2017. This research used the independent variables of Days Sales Outstanding, Days Payable Outstanding, Days Inventory Outstanding, and Cash Conversion Cycle to measure working capital management while Return on Assets was used as a measure of profitability. The samples that were used in this research are chosen via purposive sampling to meet the objective of the research and the data are secondary data taken from the company’s financial statements. Multiple regressions analysis was used to test the hypothesis and the result shows that DSO and CCC have insignificant negative impact on ROA. DIO also has insignificant but positive impact on ROA. Meanwhile, DPO shows a significant negative impact towards the ROA.