The Influences of Asset Turn Over and Net Working Capital to the Return on
Investment (Survey on State Employee Cooperatives (KPRI) in Bandung City)
Rudy Lizwaril Sjaiful*, Department of Accounting, University of Widyatama, Bandung, Indonesia.
E-mail: [email protected]
Mohd Haizam Mohd Saudi, Department of Accounting, University of Widyatama, Bandung, Indonesia.
Hammad Farhi Mohd Saudi, Universiti Sains Islam Malaysia.
Abstract--- Cooperative is the cutting edge in managing public funds. Besides collecting public funds are also channeled funds to the needy. Cooperative into an alternative community in saving and lending money because it is simpler and less complicated than banking institutions. Although the form of cooperatives, fund management institutions still have to manage the assets properly. One of them is to manage the turnover of assets in order to obtain optimal results. The return on investment (ROI) illustrates the company's ability to generate profits by using total assets (wealth) which belongs to the company. This study aims to determine the effect of the asset turnover rate of return on investment (ROI). The method used in this research is explanatory research methods. The population used in this study are all KPRI registered and submit financial statements in 2014 to the Department of Cooperatives, Industry and Trade of Bandung in 2015. The sampling technique used purposive sampling and analysis used is multiple regression and processed using SPSS 21,The results showed that the turnover of assets not significantly influence and net working capital significantly influence on the return on investment.
Keywords--- Cooperative, Net Working Capital, Asset Turn Over, Return on Investment.
I. Introduction
Cooperatives are a form of enterprise that differs from other types of business. Members of the cooperative are owners as well as users of services ( multiple identities cooperative members ), is a hallmark universal of enterprises cooperatives, Cooperatives established and managed democratically to meet the needs of members without making gains / profits as its primary purpose because the cooperative was established to improve the economic welfare of the members.
Be the same in the other countries that are growing, cooperatives in Indonesia difficult to develop and progress very far behind either by privately owned enterprises and government procurement . The government has always tried to provide various facilities and opportunities such as the ease in obtaining capital support , management ,marketing , education. . When the cooperative wants to go forward, it must offer special advantages or additional advantages. As a business entity must business practices that normally should remain in place , but on the other hand as a business entity that is different from other types of business entities [14].
Some of the phenomena associated with cooperatives accounting information are as follows: Vice President Jusuf Kalla [1] warned 62 239 cooperative units, or about 30 percent of the total 209 488 units the number of cooperatives in Indonesia that only the status of the cooperative "nameplate" or no longer active duties and functions.
Minister of Cooperatives and SMEs Anak Agung Gede Ngurah Puspayoga [2] said that as many as 62 thousand cooperatives in the country are inactive or dormant. "Of the total 147 thousand active cooperatives with the online system," he said on the anniversary of the 68th Cooperative Day in Bandar lampung,
Member of Parliament Julia R. [3] underscored the revitalization of the cooperative program. "In my opinion, the cooperative is not just a revitalized, but also must be revolutionized. I propose that the cooperative should we make a major order to compete with the private and state enterprises [15-19]. Therefore, if there is a cooperative that we can be a great support, I think there is no problem if there are parties who want to invest here, "he said.
Research on cooperatives has been quite a lot and generally only covers one cooperative, but research specializing on groups of cooperatives is still rare especially cooperative group of KPRI.
One type of cooperatives in the city of Bandung is the cooperative of the state employee Republic of Indonesia, whose members are civil servants. This cooperative was instrumental in improving the welfare of its members because the number of civil servants is quite large. From the above phenomena can be explained that the cooperative management of assets becomes crucial in a cooperative environment and other business entities in the environment in general. Managing performance reflected the achievement of ROI KPRI. Based on the above, the author intends to conduct research on the KPRI in Bandung with the title "The Influences of Net Working Capital and Asset Turn Over To The Return On Investment”
II. Methodology
This research uses descriptive analysis method , a method that illustrates what the company based on the facts / events in the company , to then be processed into data and then performed an analysis quantitatively the financial aspects (main indicators) derived from the data financial historically contained in the financial statements (balance sheet and income statement). In accordance with the title selected, so in this study, there are two variables:
1. The independent variable (X)
The independent variable is an independent variable whose existence does not constitute a factor that will affect other variables. In this study identified as X1 asset turnover and net working capital was identified as X2.
2. The dependent variable (Y).
The dependent variable is a dependent variable whose existence is determined / influenced by independent variables. In this study the level of corporate profitability (ROI) was identified as the dependent variable (Y).
Data both types of these variables are taken from the financial statements presented by KPRI Bandung. For more details can be seen in the table below:
Net Working Capital at KPRI Bandung City 2014
From the research results obtained by the fact that the net working capital KPRI quite high compared to other cooperatives in Bandung City. This can be seen in the table below:
Table 1: Net Working Capital At KPR Bandung City 2014
NO DESCRIPTION CA CL NWC
1 KPRI Mimitran 3.202.176.777 785.720.290 2.416.456.487
2 KPRI SMKN. 11 1.840.276.919 34.414.500 1.805.862.419
3 KPRI SimpayWargaWinaya 2.830.576.836 715.254.822 2.115.322.014
4 KPRI SMAN 17 595.516.716 139.454.600 456.062.116
5 KPRI SMK N 6 1.275.718.450 474.881.300 800.837.150
6 KPRI SMA N 3 1.413.336.653 156.530.614 1.256.806.039
7 KPRI LapasBanceuy 5.031.931.709 2.264.052.131 2.767.879.578
8 KPRI B4T 641.946.400 141.940.000 500.006.400
9 KPRI SMP N 6 947.597.365 79.023.403 868.573.962
10 KPRI SMP N 43 895.121.110 10.627.289 884.493.821
11 KPRI SMA N 8 1.659.752.854 304.246 1.659.448.608
12 KPRI SMA N 22 1.008.943.710 1.103.565.782 ‐94.622.072
13 KPRI Dewi Sri 7.575.579.216 949.253.951 6.626.325.265
14 KPRI LapasSukamiskin 1.590.895.527 28.200.083 1.562.695.444 15 KPRI PU CiptaKaryaInsansejahtera 727.214.259 6.283.437 720.930.822
16 KPRI SMP N 1 257.582.273 208.500.000 49.082.273
17 KPRI Diskop Pembina 1.298.477.947 252.198.541 1.046.279.406
18 KPRI SMP N 22 1.004.761.941 177.270.732 827.491.209
19 KPRI Dinkes Kota BdgMitraHusada 4.167.654.772 394.429.315 3.773.225.457 20 KPRI PSDA KertaMukti 1.829.371.197 203.447.700 1.625.923.497 21 KPRI PerputakaanJabar 1.150.141.023 556.744.900 593.396.123
22 KPRI SMP N 25 656.365.893 149.012.148 507.353.745
23 KPRI DinasSosial Prop Jabar 3.314.733.575 1.031.332.905 2.283.400.670
24 KPRI KKBD 12.388.067.686 2.927.925.511 9.460.142.175
25 KPRI Dinas Tenaga Kerja&Transmigrasi 2.832.515.846 706.617.244 2.125.898.602
26 KPRI SMA N 15 1.781.970.894 519.917.063 1.262.053.831
27 KPRI Balpekes 1.123.502.624 184.718.152 938.784.472
28 KPRI KOPPU 3J 2.561.830.238 381.396.594 2.180.433.644
29 KKB SMK I Pasundan 475.542.350 116.517.170 359.025.180 30 KPRI DinasKebakaran Brahma Mandiri 1.240.576.042 175.207.646 1.065.368.396 31 KPRI BadanPertanahan Nasional Kota Bd 1.593.734.483 379.507.242 1.214.227.241
Asset Turn Over at KPRI Bandung City 2014
Table 2: Research Variable
KPRI asset turnover can be quite low. This is due to the composition of assets KPRI is largely fixed assets. For more details can be seen in the following table:
Data obtained derived from financial statements prepared with quantitative approach. Average data analysis is basically done by comparing the quantity of working capital, working capital turnover with the level of profitability of the company for the period of 2014.. This comparison is done to see the extent of the effect of asset turnover and net working capital of the level of profitability at KPRI Bandung.
III. Results
Table 3: Asset Turn Over At Kpr Bandung City 2014
NO DESCRIPTION SALES TOTAL ASSET TATO
1 KPRI Mimitran 3.012.352.643 3.444.026.219 0,87
2 KPRI SMKN. 11 1.367.795.272 1.945.755.681 0,70
3 KPRI SimpayWargaWinaya 2.718.216.783 3.394.306.305 0,80
4 KPRI SMAN 17 670.220.035 599.525.316 1,12
5 KPRI SMK N 6 1.232.594.200 1.288.883.450 0,96
6 KPRI SMA N 3 1.079.521.150 1.413.786.553 0,76
7 KPRI LapasBanceuy 4.363.010.000 5.078.862.725 0,86
8 KPRI B4T 209.139.400 710.116.000 0,29
9 KPRI SMP N 6 1.331.858.330 971.350.163 1,37
10 KPRI SMP N 43 432.283.000 927.953.743 0,47
11 KPRI SMA N 8 1.169.109.004 1.751.803.746 0,67
12 KPRI SMA N 22 248.818.804 2.112.509.492 0,12
13 KPRI Dewi Sri 6.073.463.904 7.766.749.616 0,78
14 KPRI LapasSukamiskin 441.734.601 1.618.079.352 0,27
15 KPRI PU CiptaKaryaInsansejahtera 530.259.649 733.497.696 0,72
16 KPRI SMP N 1 208.500.000 466.647.273 0,45
17 KPRI Diskop Pembina 538.348.810 1.457.946.392 0,37
18 KPRI SMP N 22 1.003.957.222 1.029.192.986 0,98
19 KPRI Dinkes Kota BdgMitraHusada 4.727.241.741 4.322.655.371 1,09 20 KPRI PSDA KertaMukti 1.630.242.000 1.834.504.297 0,89 21 KPRI PerputakaanJabar 776.507.819 1.203.469.023 0,65
22 KPRI SMP N 25 412.700.000 691.152.796 0,60
23 KPRI DinasSosial Prop Jabar 2.177.932.856 2.362.825.777 0,92
24 KPRI KKBD 18.110.564.400 13.178.608.862 1,37
25 KPRI Dinas Tenaga Kerja&Transmigrasi 1.516.732.056 2.896.579.038 0,52
26 KPRI SMA N 15 1.537.667.906 2.219.662.254 0,69
27 KPRI Balpekes 631.296.884 1.125.552.625 0,56
28 KPRI KOPPU 3J 1.248.094.637 2.974.088.014 0,42
29 KKB SMK I Pasundan 398.893.300 475.542.350 0,84
30 KPRI DinasKebakaran Brahma Mandiri 953.021.500 1.251.267.200 0,76 31 KPRI BadanPertanahan Nasional Kota Bd 2.591.582.238 1.713.129.583 1,51
capital effect on the level of profitability of the company, then the discussion will be the authors carried out using multiple regression analysis.
To calculate the correlation of each variable , the author uses tools are software SPSS version 21 , with the following results :
Regression
Descriptive Statistics
Mean Std. Deviation N
ROI 8,7494 5,69829 31
TATO ,7542 ,32545 31
NWC 1730,8065 1920,65351 31 Return on Investment of Credit Cooperatives in Bandung City
Correlations
Table 4: Return On Investment At KPR Bandung City 2014
NO DESCRIPTION TOTAL ASSET EAT ROI
1 KPRI Mimitran 3.444.026.219 48.943.720 1,42
2 KPRI SMKN. 11 1.945.755.681 117.660.000 6,05
3 KPRI SimpayWargaWinaya 3.394.306.305 151.413.589 4,46
4 KPRI SMAN 17 599.525.316 108.811.516 18,15
5 KPRI SMK N 6 1.288.883.450 192.672.000 14,95
6 KPRI SMA N 3 1.413.786.553 125.355.979 8,87
7 KPRI LapasBanceuy 5.078.862.725 1.280.697.171 25,22
8 KPRI B4T 710.116.000 51.640.400 7,27
9 KPRI SMP N 6 971.350.163 67.245.727 6,92
10 KPRI SMP N 43 927.953.743 53.291.186 5,74
11 KPRI SMA N 8 1.751.803.746 286.689.777 16,37
12 KPRI SMA N 22 2.112.509.492 178.451.666 8,45
13 KPRI Dewi Sri 7.766.749.616 358.078.411 4,61
14 KPRI LapasSukamiskin 1.618.079.352 72.102.000 4,46 15 KPRI PU CiptaKaryaInsansejahtera 733.497.696 19.181.212 2,62
16 KPRI SMP N 1 466.647.273 74.111.171 15,88
17 KPRI Diskop Pembina 1.457.946.392 87.022.631 5,97
18 KPRI SMP N 22 1.029.192.986 33.217.835 3,23
19 KPRI Dinkes Kota BdgMitraHusada 4.322.655.371 123.022.863 2,85 20 KPRI PSDA KertaMukti 1.834.504.297 267.362.237 14,57 21 KPRI PerputakaanJabar 1.203.469.023 36.970.951 3,07
22 KPRI SMP N 25 691.152.796 66.838.500 9,67
23 KPRI DinasSosial Prop Jabar 2.362.825.777 291.264.862 12,33
24 KPRI KKBD 13.178.608.862 160.783.552 1,22
25 KPRI Dinas Tenaga Kerja&Transmigrasi 2.896.579.038 227.328.009 7,85
26 KPRI SMA N 15 2.219.662.254 282.047.937 12,71
27 KPRI Balpekes 1.125.552.625 116.888.467 10,38
28 KPRI KOPPU 3J 2.974.088.014 419.845.059 14,12
29 KKB SMK I Pasundan 475.542.350 16.807.161 3,53
30 KPRI DinasKebakaran Brahma Mandiri 1.251.267.200 148.487.850 11,87 31 KPRI BadanPertanahan Nasional Kota Bd 1.713.129.583 110.000.000 6,42 ROI level uneven among KPRI there is a very large (up 18.15 %), some are small (1.22%).
The Influences of Aset Turn Over And Net Working Capital to the Return On Investment of State Employee Cooperatives in Bandung City
In accordance with the identification of problems that have been formulated in Chapter I , namely whether the turnover of assets and net working analysis:
ROI TATO NWC Pearson ROI 1,000 -,068 -,239 Correlation TATO -,068 1,000 ,376
NWC -,239 ,376 1,000 Sig. (1-tailed) ROI . ,358 ,098
TATO ,358 . ,018 NWC ,098 ,018 .
N ROI 31 31 31
TATO 31 31 31
NWC 31 31 31
• The average ROI ( the amount of data 31 cooperatives ) is 8.74940 % with a standard deviation of 5.69829
% .
• Average TATO ( the amount of data 31 cooperatives ) is 0.7452 times with a standard deviation of 0.3245[13]
• Average Net Working Capital ( the amount of data 31 Cooperative ) is Rp 1730.80 million with a standard deviation of Rp 1920.65 million .
• The relationship between the variables ROI with TATO calculated by the correlation coefficient is
• 0.068 , while the variable ROI with NWC is 0.239 theoretically, because the correlation between the NWC greater ROI, then the variable NWC has more influence on ROI than TATO variable .
• There is a fairly strong correlation between the variables ROI with NWC, namely 0.239.
• The level of significance of the correlation coefficient of one side of the output (measured of probability) to produce numbers 0.273 and 0.022. Therefore the probability is far above and below 0.05, the correlation between variables ROI with TATO and NWC very real.
Variables Entered/Removedb
Model Summaryb
Charts
Partial Regression Plot
• Table Variables Entered shows that no variable released (removed), or in other words two independent variables included in the regression calculation.
• Figures R Square is 0.058. This means that 5.8% of the company ROI affected by variables TATO and NWC. While the rest (100 % - 5.8 % = 94.2 %) influenced by other factors.
• Standard Error of Estimate is 5.72571 % (the unit used is the dependent variable, or in this case is ROI). In the previous analysis revealed that the standard deviation of 5.69829% ROI. Therefore, smaller than the standard deviation of the ROI, the better the regression model in acting as a predictor ROI than average ROI itself.
The analysis
• From the ANOVA or F test, obtained F count equal to 0.857 with a significance level of 0.435. Therefore the probability (0.857) is much greater than 0.05, the regression model can be used to predict the ROI. Or we can say, TATO and NWC jointly affect the ROI.
References
The cooperative model has been adapted to numerous and varied businesses. In 1942 Ivan Emelianoff, a respected cooperative scholar, remarked that “the diversity of cooperatives is kaleidoscopic and their variability is literally infinite” [4].
A cooperative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically- controlled enterprise [5][12].So cooperative effort is a group the members which aims to improve the welfare of its members.
Asset Turn Over
“A company typically acquires assets for use in producing sales revenues, and profits. The ratio that indicate the effectiveness of asset utilization are often called efficiency or turn over ratios. The information needed to calculate these ratios is taken from both the income statement and balanced sheet. The first ratio an analyst turn to in evaluating the efficiency of any company is Total Asset Turn Over (TATO) [6]. So assets turn over used to assess the efficiency of the use of assets and seen from the sales achievement.
Net Working Capital
“Net working capital is Current assets minus current liabilities. The firm’s investment in current assets (like cash and marketable securities, receivables, and inventory)”.[7]. By the above opinion can be concluded that the net working capital is current assets minus current liabilities.
Return on Investment
“Return on Total Asset (Investment) as describe trough the two component of profit margin and asset turn over is part of the Du Pont system of analysis”[8]. And “ The Return On Total Assets (ROA), often call the return on investment (ROI) mesures the overall effectiveness of management ingenerating profits with itsavailable assets. The higher the firm’s return on total assets [9, 10].
IV. Conclusion
Based on the research that has been done well is done through literature research as well as research in the field, it can be concluded as follows [11]:
1) Asset Turnover (TATO) had no significant effect on the level of profitability of the company.
2) Net working capital has a significant influence on the level of profitability of the company.
3) TATO and NWC have a significant effect on the level of profitability of the company.
Acknowledgment
Some suggestions from researchers that:
1. Assets KPRI is big, in other words there is a lot of idle capital, therefore, need to be considered by KPRI to optimize existing assets.
2. In terms of increasing asset turnover (X1 variable), it is necessary that the value of sales is bigger than the sum of assets, KPRI need to make a new breakthrough in increasing sales.
References
[1] Republika.co.id “Wapres Sentil Koperasi 'Papan Nama', 13 Juli 2015 downloadable dated May 1, 2016 [2] Republika.co.id “Menteri: 62 Ribu Koperasi di Tanah Air Mati Suri, 24 Agustus 2015, downloadable dated
May 1, 2016
[3] Viva.co.id “Koperasi Harus Bisa Menopang Ekonomi Nasional” 10 Juni 2015, downloadable dated May 1, 2016.
[4] Zenli, Kimberly A. and Robert Cropp, “Cooperatives: Principles and practices in the 21st century”, University of Wisconsin, Madison, 2004, pp.1
[5] ICCA, “Co-operative identity, values & principles”, http://ica.coop/en/whats-co-op/co-operative-identity- values-principles
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[7] Van Horne, James C And John M. Wachowicz, Jr, “Fundamental of Financial Management”, 13th Edition, Pearson Education, London, 2008, pp. 206
[8] Block, Stanley B and Geoffrey A. Hirt, “Foundations of Financial Management”, 8th Edition, McGraw- Hill, Boston, 2005, pp.56
[9] Gitman, Lawrence J., “Managerial Finance”, 8th Edition, Perason Addison Wesley, Boston, 2006, pp..68.
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