THE INFLUENCE OF WORKING CAPITAL MANAGEMENT COMPONENTS ON PROFITABILITY FOR THE AUTOMOTIVE AND COMPONENTS SECTOR

Abstract

The purpose of this study is to find the influence of working capital management components (account payable, account receivable, inventory and firm size) on profitability in automotive and components sector in Indonesia period 2011 – 2015. The type of data is secondary data from annual reports of each company that were derived from Indonesia Stock Exchange (IDX) website. Through purposive sampling, this research got 50 data which fulfill he criteria. This research is quantitative research and used some analysis methods, such as descriptive analysis, multiple regression analysis and hypothesis testing. This research uses Eviews9 as the statistical tool. Based on the results, there are 3 independent variables which are average payment period, average collection period and days in inventory have significant relationship on return on assets (ROA). While firm size is insignificant on ROA. Simultaneously, those independent variables in this research contribute 77.88% influences to dependent variables. The remaining of 22.12% is influenced by other factors outside the research.