Business, Management and Accounting
4 years ago

Negative impact: Working capital hurts profitability for Indonesian automotive companies.

Jurnal Mantik
The Role of Working Capital on Profitability After Tax on Automotive And Allied Products Companies in Indonesia: The Role of Working Capital on Profitability After Tax on Automotive And Allied Products Companies in Indonesia
Galih Wicaksono, Yeni Puspita

Paper Summary

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The study looked at how working capital affects the profitability of automotive companies in Indonesia. They analyzed factors like working capital turnover, liquidity, and cash turnover. The results showed that only working capital turnover and liquidity had a significant negative impact on profitability. When all factors were considered together, they only explained 19.4% of the variation in profitability.