Analysis of the Effect of Inventory Turnover, Receivables Turnover and Leverage on Profitability Levels in Automotive Companies Listed on the Indonesian Stock Exchange

Husni  Mubaarak; M.  Syafii

doi:10.37385/ijedr.v5i2.5480

Authors

Husni Mubaarak Universitas Sumatera Utara
M. Syafii Universitas Sumatera Utara

DOI:

https://doi.org/10.37385/ijedr.v5i2.5480

Keywords:

Inventory Turnover, Receivables Turnover, Leverage, Profitability Level

Abstract

Profitability is a ratio that measures ability company to pay all short-term financial obligations at maturity using available current assets. The research method used is a descriptive qualitative approach with descriptive and inferential analysis. The population of this research is automotive companies listed on the Indonesia Stock Exchange (BEI) in 2016-2020, with samples carried out using a purposive sampling method of 9 companies. The research results show that Leverage has a significant effect on Profitability Levels in automotive companies listed on the Indonesia Stock Exchange. This means that the higher the company's leverage ratio, the more impact it will have on the company's level of profitability. Inventory turnover has a significant effect on profitability levels in automotive companies listed on the Indonesia Stock Exchange. This also indicates that when inventory turnover increases or decreases, it will have an impact on the company's level of profitability. Receivables Turnover has a significant effect on Profitability Levels in automotive companies listed on the Indonesia Stock Exchange. This indicates that receivables turnover, whether large or small, will influence the company's level of profitability.

References

Affandi, F., Sunarko, B. A. M. B. A. N. G., & Yunanto, A. (2019). The impact of cash ratio, debt to equity ratio, receivables turnover, net profit margin, return on equity, and institutional ownership to dividend payout ratio. Journal of Research in Management, 1(4), 1-11.

Amanda, R. I. (2019). The impact of cash turnover, receivable turnover, inventory turnover, current ratio and debt to equity ratio on profitability. Journal of research in management, 2(2), 14-22.

Binsaddig, R., Ali, A., Al-Alkawi, T., & Ali, B. J. (2023). Inventory Turnover, Accounts Receivable Turnover, and Manufacturing Profitability: An Empirical Study. International Journal of Economics and Finance Studies, 15(1), 1-16.

Hasanudin, H., Awaloedin, D. T., & Arviany, D. D. (2022). The impact of cash turnover, accounts receivable turnover, and inventory turnover on return on assets (ROA) for agribusiness companies listed on the Indonesia stock exchange (IDX) during the period 2016-2020. Jurnal Info Sains: Informatika dan Sains, 12(02), 37-44.

Herison, R., Sahabuddin, R., Azis, M., & Azis, F. (2022). The effect of working capital turnover, accounts receivable turnover and inventory turnover on profitability levels on the Indonesia Stock Exchange 2015-2019. Psychology And Education, 59(1).

Hiran, S. (2016). Financial Performance Analysis of Indian Companies Belongs to Automobile Industry with Special Reference to Liquidity & Leverage. International journal of multidisciplinary and current research, 4, 39-51.

Innocent, E. C., Mary, O. I., & Matthew, O. M. (2013). Financial ratio analysis as a determinant of profitability in Nigerian pharmaceutical industry. International journal of business and management, 8(8), 107.

Jasmani, J. (2019). The effect of liquidity and working capital turnover on profitability at PT. Sumber Cipta Multiniaga, South Jakarta. PINISI Discretion Review, 3(1), 29-38.

Jindal, D., Jain, S., & Vartika, K. (2017). Effect of receivables management on profitability: A study of commercial vehicle industry in India. management, 2(2), 246-255.

Kartika, A. D., Hertati, L., & Munandar, A. (2023). The Effect of Leverage, Acceptable Turnover and Inventory Turnover On Company Profitability. Journal of Humanities, Social Sciences and Business, 2(2), 455-464.

Mulyono, S., Djumahir, D., & Ratnawati, K. (2018). The effect of capital working management on the profitability. Jurnal Keuangan dan Perbankan, 22(1), 94-102.

Nasution, I. A., Sembiring, F., Batubara, M., & Putri, T. O. D. S. (2022). The Effect Of Cash Turnover, Receivable Turnover, And Inventory Turnover On Liquidity On Liquidity Of Consumer Goods Companies Listed In The Indonesia Stock Exchange In the 2011-2014 Period. Enrichment: Journal of Management, 12(2), 1840-1845.

Oktavia, D., & Indrati, M. (2021). Effect Of Receivables, Inventories, and Payables On Working Capital. Journal Research of Social Science, Economics, and Management, 1(2), 101-115.

Wajo, A. R. (2021). Effect of cash turnover, receivable turnover, inventory turnover and growth opportunity on profitability. ATESTASI: Jurnal Ilmiah Akuntansi, 4(1), 61-69.

Wulandari, N., & Lubis, I. (2021). Influence of receivables turnover and inventory turnover to profitability PT Kimia Farma (Persero) Tbk. Indonesian Financial Review, 1(2), 114-132.