Cach to Cash (C2C): Insights Into Working Capital Turnover and Profitability
DOI:
https://doi.org/10.1229/tecempresarialjournal.v18i2.223Keywords:
Working Capital Management, Profitability, Cash Conversion CycleAbstract
The research objective was explain the effect of working capital management on profitability as measured by Net Profit Margin (NPM), Return on Equity (ROE), Return on Assets (ROA), Return On Capital Employed (ROCE) and Operating Profit Margin (OPM). ) in 18 companies in the food and beverage sub-sector listed on the Indonesia Stock Exchange (IDX) for the 2018-2021 period. The data analysis technique used is panel data regression test with Eviews. The results showed that inventory turnover has a positive effect on ROA and ROCE, while inventory turnover has no effect on NPM, ROE and OPM. The average payment period has a positive effect on NPM, while the average payment period has no effect on ROA, ROE, ROCE and OPM. The average collection period has a negative effect on NPM, while the average collection period has no effect on ROA, ROE, ROCE and OPM. The cash conversion cycle has a positive effect on NPM and OPM, while the cash conversion cycle has no effect on ROA, ROE and ROCE.
References
Ahkam, S. N., Nahar, N., & Shorna, S. R. (2021). Management of receivables, financial distress, and profitability in bangladesh. Asian Economic and Financial Review, 11(9), 710–723. https://doi.org/10.18488/JOURNAL.AEFR.2021.119.710.723
Aldubhani, M. A. Q., Wang, J., Gong, T., & Maudhah, R. A. (2022). Impact of working capital management on profitability: evidence from listed companies in Qatar. Journal of Money and Business, 2(1), 70–81. https://doi.org/10.1108/jmb-08-2021-0032
Anton dan Nucu, 2021). (2021). The Impact of Working Capital Management on Firm Profitability and Value. Journal of Business and Technology, 5(1), 34. https://doi.org/10.4038/jbt.v5i1.26
Astuti, E. P., & Aprianti, S. (2020). Pengaruh Perputaran Piutang dan Perputaran Persediaan Terhadap Profitabilitas Pada PT. Mustika Ratu Tbk. Jurnal SEKURITAS (Saham, Ekonomi, Keuangan Dan Investasi), 3(2), 176. https://doi.org/10.32493/skt.v3i2.4304
Belay, B., Assefa, C., Extension, A., & Ababa, A. (2000). GSJ : Volume 9 , Issue 8 , August 2021 , Online : ISSN 2320-9186. 9(8), 304–315.
Boisjoly, R. P., Conine, T. E., & McDonald, M. B. (2020). Working capital management: Financial and valuation impacts. Journal of Business Research, 108(September 2019), 1–8. https://doi.org/10.1016/j.jbusres.2019.09.025
Elsayed, K., & Wahba, H. (2016). Reexamining the relationship between inventory management and firm performance: An organizational life cycle perspective. Future Business Journal, 2(1), 65–80. https://doi.org/10.1016/j.fbj.2016.05.001
Fejzullahu, A., & Govori, F. (2021). Working Capital Management and Profitability of Manufacturing Companies in Kosovo. Management (Croatia), 26(2), 277–294. https://doi.org/10.30924/MJCMI.26.2.16
Giriyani, N. L. P. W., & Diyani, L. A. (2019). Pengaruh Cash Conversion Cycle, Likuiditas Dan Firm Size Terhadap Profitabilitas. Jurnal Profita, 12(1), 130. https://doi.org/10.22441/profita.2019.v12.01.010
Guragai, B., Hutchison, P. D., & Farris, M. T. (2019). Cash-to-cash (C2C) length: Insights on present and future profitability and liquidity. Advances in Management Accounting, 31, 133–151. https://doi.org/10.1108/S1474-787120190000031007
Haron, R., & Nomran, N. M. (2016). Determinants of working capital management before, during, and after the global financial crisis of 2008: Evidence from Malaysia. The Journal of Developing Areas, 50(5), 461–468. https://doi.org/10.1353/jda.2016.0029
Jakpar, M, T., TK, S., A, J., KT, M., & MS, S. (2017). Working Capital Management and Profitability: Evidence from Manufacturing Sector in Malaysia. Journal of Business & Financial Affairs, 06(02). https://doi.org/10.4172/2167-0234.1000255
Jusmansyah, M. (2020). Analisis Pengaruh Manajemen Modal Kerja dan Leverage Terhadap Gross Profit Margin. Jurnal Akuntansi Dan Keuangan, 9(1), 32–48.
Kartikasary, M., Marsintauli, F., Sitinjak, M., Laurens, S., Novianti, E., & Situmorang, R. (2021). The effect of working capital management, fixed financial asset ratio, financial debt ratio on profitability in Indonesian consumer goods sector. Accounting, 7(3), 661–666. https://doi.org/10.5267/j.ac.2020.12.011
Kasmir. (2018). Analisis Laporan Keuangan. Depok: PT Raja Grafindo Persada.
Kasozi, J. (2017). The effect of working capital management on profitability: A case of listed manufacturing firms in South Africa. Investment Management and Financial Innovations, 14(2), 336–346. https://doi.org/10.21511/imfi.14(2-2).2017.05
Killingsworth, J., & Mehany, M. H. (2018). Implications of collection period variance in the construction industry. Journal of Financial Management of Property and Construction, 23(3), 330–348. https://doi.org/10.1108/JFMPC-01-2018-0004
Lee, C. C. (2023). Analyses of the operating performance of information service companies based on indicators of financial statements. Asia Pacific Management Review, xxxx. https://doi.org/10.1016/j.apmrv.2023.01.002
Mandipa, G., & Sibindi, A. (2022). Financial Performance and Working Capital Management Practices in the Retail Sector: Empirical Evidence from South Africa. Risks, 10(3). https://doi.org/10.3390/risks10030063
Mardones, J. G. (2022). Working capital management and business performance: evidence from Latin American companies. Economic Research-Ekonomska Istrazivanja , 35(1), 3189–3205. https://doi.org/10.1080/1331677X.2021.1986675
Mauliddiarti, D., Mauluddi, H. A., & Karnawati, H. (2022). Pengaruh Perputaran Piutang dan Persediaan terhadap Net Profit Margin pada Perusahaan Makanan dan Minuman di Bursa Efek Indonesia. Indonesian Journal of Economics and Management, 2(3), 590–598. https://doi.org/10.35313/ijem.v2i3.3129
Mazanec, J. (2022). The Impact of Working Capital Management on Corporate Performance in Small–Medium Enterprises in the Visegrad Group. Mathematics, 10(6). https://doi.org/10.3390/math10060951
Megawati, M., & Mulyanto, S. (2020). Pengaruh Cash Conversion Cycle terhadap Profitabilitas Perusahaan Manufaktur yang Terdaftar di Bursa Efek Indonesia Periode 2010-2017. Keizai, 1(1). https://doi.org/10.56589/keizai.v1i1.148
Micheal, A., Segun, A., & Taiwo, O. (2017). Impact of working capital management on financial performance of quoted consumer goods manufacturing firms in Nigeria. Covenant Journal of Business & Social Sciences, 8(2), 1–22.
Nguyen, A. H., Pham, H. T., & Nguyen, H. T. (2020). Impact of working capital management on firm’s profitability: Empirical evidence from Vietnam. Journal of Asian Finance, Economics and Business, 7(3), 115–125. https://doi.org/10.13106/jafeb.2020.vol7.no3.115
PHAM, K. X., Sfdgdg, E., & Afesf, E. (2020). Effect of Working Capital Management on the Profitability of Steel Companies on Vietnam Stock Exchanges. The Journal of Asian Finance, Economics and Business, 7(10), 741–750. https://doi.org/10.13106/jafeb.2020.vol7.n10.741
Phuong, N. T. T., & Hung, D. N. (2020). Impact of working capital management on firm profitability: Empirical study in Vietnam. Accounting, 6(3), 259–266. https://doi.org/10.5267/j.ac.2020.3.001
Pratama, E. H., Pontoh, W., & Pinatik, S. (2021). Analisis Dampak COVID-19 Terhadap Kinerja Keuangan Perusahaan Ritel yang Terdaftar di Bursa Efek Indonesia. Going Concern : Jurnal Riset Akuntansi, 16(2), 111–118.
Purusa, S. U. (2019). Analisis Pengaruh Average Payment Period, Average Collection Period, Inventory Turnover in Days, dan Current Ratio terhadap Profitabilitas dengan Firm Size sebagai Variabel Kontrol (Studi Empiris Pada Properti Yang Terdaftar di Bursa Efek Indonesia Tahun . Jurnal Ekonomika Dan Bisnis, Universitas Diponogoro, 1(1), 1–33.
Rey-Ares, L., Fernández-López, S., & Rodeiro-Pazos, D. (2021). Impact of working capital management on profitability for Spanish fish canning companies. Marine Policy, 130. https://doi.org/10.1016/j.marpol.2021.104583
Rosyid, S. F., & Prasetiono. (2019). Analisis Pengaruh Cash Convertion Cycle, Average Collection Period, Inventory Collection Period, Average Payment Period dan Current Ratio Terhadap Profitabilitas (Studi Empiris Pada Sektor Industri Barang Konsumsi BEI Pada Tahun 2013-2017). Diponegoro Journal of Management, 8(4), 43–53.
Sensini, L., & Vazquez, M. (2021). Effects of Working Capital Management on SME Profitability: Evidence from an Emerging Economy. International Journal of Business and Management, 16(4), 85. https://doi.org/10.5539/ijbm.v16n4p85
Seth, H., Chadha, S., Ruparel, N., Arora, P. K., & Sharma, S. K. (2020). Assessing working capital management efficiency of Indian manufacturing exporters. Managerial Finance, 8, 1061–1079. https://doi.org/10.1108/MF-02-2019-0076
Soukhakian, I., & Khodakarami, M. (2019). Working capital management, firm performance and macroeconomic factors: Evidence from Iran. Cogent Business and Management, 6(1). https://doi.org/10.1080/23311975.2019.1684227
Ulum, M. M., & Hartono, U. (2017). Pengaruh Cash Conversion Cycle, Inventory Turnover, Average Payment Period, Cash Turnover dan Leverage Terhadap Profitabilitas Perusahaan (Studi pada Perusahaan Sektor Trade, Services & Investment Periode 2012-2015). Jurnal Ilmu Manajemen, 5(4), 1–11.
Vicente-Ramos, W. E., Ames Porras, M. R., Quispe, R. M., & Rojas Zacarías, M. A. (2020). Working Capital Management and Return on Assets of Manufacturing Industry of Peru. International Journal of Financial Research, 11(2), 382–389. https://doi.org/10.5430/ijfr.v11n2p382
Wulandari, W. (2018). Pengaruh Average Collection Period, Average Payment Period dan Average Day’s Inventory Terhadap Profitabilitas Perusahaan Farmasi yang Terdaftar Di BEI Periode 2012 - 2016. Jurnal Sekolah Tinggi Ilmu Ekonomi Indonesia (STEI) Jakarta., 1–23.
Yilmaz, I., & Acar, G. (2019). the Effect of Cash Conversion Cycle on Profitability in Omani Companies. International Journal of Economics, Management and Accounting, 27(2), 269–290.
Yousaf, M., & Bris, P. (2021). Effects of working capital management on firm performance : Evidence from the EFQM certified firms Effects of working capital management on firm performance : Evidence from the EFQM certified firms. Cogent Economics & Finance, 9(1). https://doi.org/10.1080/23322039.2021.1958504
Yudha, D. P. (2017). Analisis Pengaruh Current Ratio, Inventory Turnover, Debt To Equity Ratio dan Size Terhadap Return On Asset (Studi Pada Perusahaan Automotive and Allied Product yang Listed di Bursa Efek Indonesia Tahun 2004-2009). Jurnal Bisnis Strategi, 20(1), 25–37.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2023 Tec Empresarial
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
