The Influence of Working Capital and Solvability on Profitability and Firm's Value in the Infrastructure, Utilities and Transportation Sector
Journal: International Journal of Science and Research (IJSR) (Vol.7, No. 6)Publication Date: 2018-06-05
Authors : Ditta Prissylia; Lukytawati Anggraeni; Hendro Sasongko;
Page : 1521-1526
Keywords : Working capital; Solvability; Profitability; and Tobins Q;
Abstract
The research is conducted to know working capital and solvability to profitability and firms value. The objects used are 21 companies of infrastructure, utility and transportation sectors of Indonesia Stock Exchange in 2010-2016. The hypothesis in this study is using panel data regression. The study aims to explore the effects of working capital and solvabilitas component i. e cash conversion cycles (CCC), current asset to total asset ratio (CATAR), current liabilities to total asset ratio (CLTAR), and degree of financial leverage (DFL) to the firms performance by looking at firms value i. e Tobins Q (TQ) and profitability i. e. net operating profit (NOP). The results shows that CCC has a positive influence on the profitability of the company sector, but having a negative influence on the firms market value. DFL has a positive influence on profitability and firm value. Companies with high CCC scores require higher external financing. Therefore, the importance of managing working capital needs to ensure an increase in the firms value and profitability of the company and strategic thinking in the operational aspects of the company to operate efficiently and effectively.
Other Latest Articles
- Simulation and Analysis on Flow Field of Nozzle Position of Hydraulic Thruster Based on CFD
- Impact of Loader Size on Dowtime Generation in Primary Crushing Plant
- Effectiveness of Information, Education, Communication (IEC) Package on Knowledge of Self-Care Management of Pregnancy Induced Hypertension (PIH) among Antenatal Mothers with PIH Attending Antenatal OPD
- Approach and Benefits of Sustainable Solid Waste Management
- Design and CFD Analysis of Conical Shape Draft Tube
Last modified: 2021-06-28 19:15:41