Working Capital and Debt Policy on Profitability of The Companies | Zendy

Lihard Lumapow | Zendy; Ramon Arthur Ferry Tumiwa | Zendy

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Working Capital and Debt Policy on Profitability of The Companies

Author(s) -

Lihard Lumapow,

Ramon Arthur Ferry Tumiwa

Publication year - 2020

Publication title -

international journal of accounting and finance in asia pasific

Language(s) - English

Resource type - Journals

eISSN - 2684-9763

pISSN - 2655-6502

DOI - 10.32535/ijafap.v3i2.832

Subject(s) - profitability index , stock exchange , working capital , nonprobability sampling , business , panel data , profit (economics) , debt , sample (material) , debt ratio , return on capital employed , finance , economics , econometrics , capital formation , financial capital , microeconomics , population , chemistry , demography , chromatography , sociology

Profitability is a measure of a company's success in making a profit. The objectives of this study are: (1) to test and analyze whether profitability is affected by working capital, and (2) to test and analyze whether profitability is affected by debt policy. This research uses quantitative research methods, using a sample of 12 automotive and components companies listed on the Indonesia Stock Exchange in 2012 to 2017 with a purposive sampling technique. The analysis technique in this study uses panel data with multiple regression. The results obtained indicate that working capital has a negative and not significant effect on profitability, as well as debt policy variables have a negative but not significant effect on profitability.

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