| Summary: | Working capital management has a profound effect on profitability and
risk, as well as the value of the company. In working capital investment involve
trade-offs between profitability by risks. Decision that desiring greater
profitability tend to be at greater risk as well, and vice versa.
Profitability of manufacturing companies in Indonesia are influenced by
variety of financial factors that can be measured using financial ratios. The
purpose of this study was to analyze whether the liquidity variables such as
Number of Days Account Receivable, Number of Days Inventory, Current Ratio,
Cash Conversion Cycle, Leverage dan Net Working Capital Level have an
influence on the company's profitability as measured by using Return On Total
Assets.
The population in this study were all manufacturing companies listing on
the Stock Exchange in the year 2007-2011. Samples were taken using a purposive
sampling method, in order to get 58 companies in the sample. Influence of
independent variables such as: Number of Days Account Receivable, Number of
Days Inventory, Current Ratio, Cash Conversion Cycle, Leverage dan Net
Working Capital Level to Return On Total Asset investigated using regression
analysis method.
The results with a partial test showed that there are 5 variables: Number of
Days Account Receivable, Number of Days Inventory, Current Ratio, Cash
Conversion Cycle, Leverage has a significant influence on return on Total assets.
While the Net Working Capital level had no significant effect on return on assets.
The simultaneous test results showed Number of Days Account Receivable,
Number of Days Inventory, Current Ratio, Cash Conversion Cycle, Leverage
dan Net Working Capital Level have an influence on return on Total assets in
manufacturing companies listed on the Indonesia Stock Exchange in the year
2007-2011.
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