Vol. 10, No. 1, June 2020, pp. 8-13
ISSN: 2720-9830, 8
Journal homepage: https://jurnal.darmaagung.ac.id/index.php/socio/about
The Effect Of Working Capital Turnover On Profitability In Property And Real Estate Companies Listed On The Indonesia Stock Exchange
Anita Miralda Sinaga Universitas Darma Agung
Article Info ABSTRACT
Article history:
Received April 2020 Revised May 2020 Accepted June 2020
This study aims to determine the effect of working capital turnover on profitability in property and real estate companies listed on the Indonesian Stock Exchange. The sampling technique used is purposive sampling. The samples are 24 companies, so the research data analyzed are 48. Data analysis techniques used used are descriptive statistics, classical assumption test, and multiple linear regression analysis. The results of the multiple linear regression test have a value of Y= -1.596+0.246X. The results of the partial t test indicate that working capital turnover has no effect. The value of 𝑡𝑐𝑜𝑢𝑛𝑡 (1.543) < 𝑡𝑡𝑎𝑏𝑒𝑙 (2.014) with a significant value (0.130 > 0 ,05) .
Keywords:
Profitability
Working Capital Turnover
This is an open access article under the CC BY-SA license.
Corresponding Author:
Anita Miralda Sinaga
Department of Management, Universitas Darma Agung.
Email: [email protected]
INTRODUCTION
Every company in carrying out its activities always has a goal and that goal is profit or maximum profit. And to achieve this goal the company must be able to monitor every turnover of working capital so that it can return in accordance with the time. The more working capital turnover occurs, the more profitable the company will be.
Working capital turnover will also have an influence on the profitability of a company, an effective working capital turnover that quickly returns will be able to increase company profits so that the company will be able to carry out its activities smoothly without being hampered by unreturned funds.
The purpose of working capital management is to manage each item of current assets and current liabilities in such a way that the desired amount of net working capital (current assets minus current liabilities) can be maintained.
So this study will try to re-examine the variables that have previously been studied with the title "The Effect of Working Capital Turnover on Profitability in Property and Real Estate Companies Listed on the Indonesia Stock Exchange".
Formulation of the problem
Based on the description of the background of the problem above, the problem that can be raised is whether there is an effect of working capital turnover on profitability proxied by net profit margin (NPM) in Property and Real Estate companies listed on the Indonesia Stock Exchange in the period 2018 and 2019?
Research purposes
The aim of this study is to determine the effect of working capital turnover on profitability in Property and Real Estate companies listed on the Indonesia Stock Exchange.
METHOD
Research Location and Time
In conducting research to obtain data that supports the writing of this thesis, research on property and real estate companies listed on the Indonesia Stock Exchange. This research was conducted by means of secondary research, namely by taking information data through internet access to the website www.idx.co.id.
This research was conducted from March to August 2021.
Population and Sample
The population used in this study are Property and Real Estate companies listed on the Indonesia Stock Exchange in 2018 and 2019.
Sampling in this study using purposive sampling, namely the technique of determining the sample with certain criteria. The sampling criteria in this study are:
The company was listed on the Indonesia Stock Exchange during the research year. Companies reporting financials from 2018 and 2019. The company earned a profit during the research year. There are 54 property and real estate companies listed on the Indonesia Stock Exchange during the 2018 and 2019 periods.
Operational definition
Table 1. Operational Definition
Types and Sources of Research Data
The type of data used in this study is secondary data. Secondary data sources are research data sources obtained by researchers indirectly through intermediary media, in the form of 2018 and 2019 financial reports on the Indonesia Stock Exchange. Data sources obtained from the Indonesia Stock Exchange database namely www.idx.co.id.
Method of collecting data
The method used when collecting data consists of several methods, namely:
Library Research Methods (Library Researching)
In other words, this research was conducted by taking written data and information.
Field Method
It is a research conducted by collecting data and information obtained and directly observed. This data collection technique is obtained from the internet through the Indonesia Stock Exchange website, namely www.idx.co.id.
Data analysis method
Descriptive Data Analysis Method
This analysis method is used to test by collecting data with the help of SPSS software (statistical package social science).
Normality test
The way the analysis is carried out is to use a histogram where:
If the data spreads around the diagonal line and follows the direction of the diagonal line or the histogram graph shows a normal distribution pattern, then the data pattern is normally distributed.
If the data spreads far from the diagonal line and does not follow the diagonal line or the histogram graph does not show a normal distribution pattern, then the data pattern is not normally distributed.
Simple Linear Regression Analysis
Is a useful method for drawing conclusions based on theories that are generally accepted as truth and
comparing with reality. From the results of these comparisons will be known deviations that occur and then a conclusion can be drawn and provide the necessary suggestions.
Hypothesis test
Table 2. Correlation coefficient
Jurnal Ilmiah Socio Secretum, Vol. 10, No. 1, June 2020: 8-13 RESULTS AND DISCUSSION
Descriptive Research Object Company history
Property and Real Estate industry are generally two different things. Property according to the Decree of the Minister of Public Housing No. 05/KPTS/BKP4N/1995, Ps 1.a:4 Property is land rights and or permanent buildings that are objects of Real Estate owners plus laws such as rent and ownership. While Real Estate is land and all permanent improvements on it including buildings such as buildings, road construction, open land, and all other forms of development that are permanently attached. According to the laws and regulations in PMDN No. 5 of 1974 which regulates the real estate industry.
Property and Real Estate companies are one of the industrial sectors listed on the Indonesia Stock Exchange. Property development is so rapid at this time and will be even bigger in the future.
The number of property companies listed on the Indonesia Stock Exchange in 2003 was 30 companies.
In this study, the sample criteria are:
APLN (Agung Podomoro Land Tbk) ASRI (Alam Sutera Realty Tbk) BAPA (Bekasi Asri Pemula Tbk) BEST (Bekasi Fajar Industry Estate Tbk) BIKA ( Binakarya Jaya Abadi Tbk) CITY(Natura City Developments Tbk) CTRA (Ciputra Development Tbk) DILD (Intiland Development Tbk) DMAS (Puradelta Lestari Tbk) DUTI (Duta Pertiwi Tbk) GAMA (Gading Development Tbk) FORZ (Forza Land Indonesia Tbk) GWSA (Greenwood Sejahtera Tbk) JRPT (Jaya Real Property Tbk) KIJA (Jababeka Industrial Estate Tbk) LAND (Trimitra Propertindo Tbk) LPCK (Lippo Cikarang Tbk) LPKR (Lippo Karawaci Tbk) MDLN (Modernland Realty Tbk) MKPI (Metropolitan Kentjana Tbk) MMLP (Mega Manunggal Property Tbk) MTLA (Metropolitan Land Tbk) RDTX (Roda Vivatex Tbk) SMDM (Suryamas Dutamakmur Tbk)
Descriptive statistics
The sample (N) in the study were 24 service companies in the Property and Real Estate sector for 2 periods, namely from 2018 and 2019 so that the total research data amounted to 48 data. The results of data processing from the sample can be seen from the descriptive statistics below:
Table 3 Descriptive Statistics
Normality test
Table 4. Kolmogorov-Smirnov (K-S) Data Normality Test
From the results of the SPSS output above, the magnitude of the Asymp.sig value is 0.078, so it can be concluded that the data is normally distributed because the significant value is > 0.05. From the results of the
SPSS output above, it can be seen that after the normality test, the Asymp.sig value is obtained > 0.078 which means the data is normally distributed.
From the results of the SPSS output above, we can see that the histogram graph shows that the data has a normal distribution. This can be seen from the histogram graph showing the distribution of data following a diagonal line that does not deviate to the left or right. This is also supported by the results of the normality test using the Normal Probability Plot Test (P-P Plot graph). Normal Probability Plot test using actual data and the results of the data show a normal distribution after being tested using SPSS.
Simple Linear Regression Analysis
Table 5. Simple Linear Regression Analysis
Based on table 4.5, it can be concluded that the constant value (a) is -1.596, and the regression coefficient (b) is 0.246 and the tcount is 1.543. The result is a significant value of 0.13 > 0.05, which means that the working capital turnover variable (NPM) ) has a significant effect on profitability.
Hypothesis testing
The results of the t-test (partial) using a significant rate of 5% (𝖺=0.05). So the two sides are 2.5% or 0.025 and the degrees of freedom (df) consisting of Df = n –k-1 = 48-1-1 = 46 , then we get = 2.012.
The working capital turnover variable has a value of i𝑡𝑢𝑛g of 1.543 < 2.014 with a significant value of 0.130
> 0.05. From these results, it is not in accordance with the test rules, then 0 is rejected, 1 is accepted, it can be concluded that working capital turnover has no effect on profitability.
Table 6. correlation coefficient
The coefficient of determination (𝑅2) is a value (proportion value) that measures how much the ability of the independent variables used in the regression equation to explain the variation of the dependent variable. The value (𝑅2) ranges from 0 to 1, and if the value is closer to 1, the better, meaning that the independent variables provide almost all the information needed to predict the variation of the dependent variable.
To see how much working capital turnover is influenced by profitability, the authors use the coefficient of determination (𝑅2) in the following table:
Table 7. Determination Test Results
Based on table 7. shows that the magnitude of the effect of working capital turnover on profitability in property and real estate companies listed on the Indonesia Stock Exchange. By looking at the results of R square or 2 is
Jurnal Ilmiah Socio Secretum, Vol. 10, No. 1, June 2020: 8-13
0.049 or 49%. This value implies that the effect of the working capital turnover variable (X) on the profitability variable (Y) is 49% and the remaining 51% is caused by other variables.
Discussion of Research Results
The Effect of Working Capital Turnover on Profitability
From the results of the SPSS version 22 analysis on the t test test, there is a i𝑡𝑢𝑛g value of 1.543 < 2.014 with a significant value of 0.130 > 0.05 with the effect of working capital turnover on profitability is negative, then 0 is accepted, ℎ1 is accepted, it can be concluded that working capital turnover is not effect on profitability.
The simple linear regression equation is as follows Y= -1.596 + 0.246X . From the regression equation above, several things are interpreted, including:
The constant value (a) = -1.596 explains that in the absence of X (working capital turnover) then the acquisition of Y (Profitability) is -1.596. The value of b = 0.246 has a regression coefficient value of 0.246. The coefficient value shows that X (working capital turnover) has no effect on Y (profitability). This illustrates that if there is an increase in working capital turnover by 1 percent, the profitability value will increase by 0.246 with the assumption that other variables are not considered constant. While the result of R square or 2 is 0.049 or 49%.
This value implies that the effect of the working capital turnover variable (X) on the profitability variable (Y) is 49% and the remaining 51% is caused by other variables.
The results of this test are not in line with previous research, namely Finsi Novtelia Luftia (2016) which found that the effect of working capital turnover had a significant effect on profitability partially indicated by the magnitude of i𝑡𝑢𝑛g of –(4.118) < (3.182) and sig (0.026) < (0.05) means is rejected and is accepted. Nike Ismiati (2013) who found that the effect of working capital turnover on profitability was indicated by a large i𝑡𝑢𝑛g of –(4.467) < (1.969) with a significant value of 0.000 <0.05. The results of this test are in line with previous research, namely Silviana Dwi Sulistianingrum (2012) which found that there was no effect of working capital turnover on profitability as indicated by a significant value (0.785) > (0.025)
CONCLUSION
Based on the results of data analysis and discussion of the effect of working capital turnover on profitability, the following conclusions can be drawn: The results of the partial t test indicate that working capital turnover has no effect on profitability. This is evidenced by the value (1.543 < 2.014 with a significance value greater than 0.05 (0.130 > 0.05). The regression equation between working capital turnover and profitability is Y = -1.596 + 0.246 X means that there is no positive relationship between working capital turnover and profitability. The result of the coefficient of determination test shows that the value of R square is 0.049 or 49%. This means that the effect of the working capital turnover variable on profitability is moderate.
This value implies that the effect of the working capital turnover variable (X) on the profitability variable (Y) is 49% and the remaining 51% is caused by other variables. Provide a statement that what is expected, as stated in the "INTRODUCTION" section can ultimately result in "RESULTS AND DISCUSSION" section, so there is compatibility. Moreover, it can also be added the prospect of the development of research results and application prospects of further studies into the next (based on result and discussion).
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