THE IMPACT OF CASH CONVERSION CYCLE (CCC) TOWARDS PROFITABILITY OF ALL FIRMS LISTED ON INDONESIA STOCK EXCHANGE (IDX) IN THE PERIOD OF 2009 â 2019
Indonesia is one of the largest economies in the world, with the total population around 269 million people, Indonesia economy is account for the 10 th largest in the world in terms of purchasing power parity. However, In the period of 2009 through 2019, the firms listed in Indonesia Stock Exc...
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| Format: | Theses |
| Language: | Indonesia |
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| Online Access: | https://digilib.itb.ac.id/gdl/view/52086 |
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| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | Indonesia is one of the largest economies in the world, with the total population around
269 million people, Indonesia economy is account for the 10
th
largest in the world in
terms of purchasing power parity. However, In the period of 2009 through 2019, the
firms listed in Indonesia Stock Exchange (IDX) have experienced a fluctuating value
in their profitability with the tendency to decline. Several researchers have found that
profitability is influenced by working capital management. Working capital is a
measure of a firm’s liquidity that available for businesses to operate which the
components are including inventory, account receivables, and account payables. Tools
to measure working capital is cash conversion cycle (CCC) which is considering the
key aspect of current asset management.
The objective of this research is to find evidence that cash conversion cycle (CCC)
including its components Average Age Inventory (AAI), Average Collection Period
(ACP), and Average Payment Period (APP) could impact the profitability of all the
firms listed on Indonesia Stock Exchange (IDX) in the period of 2009 through 2019.
The data that is used on this research is covering 341 companies that are listed in the
period of 2009 through 2019. The data analysis is conducted using fixed effect panel
data regression.
i
The findings of this research show that cash conversion cycle (CCC) and its
components such as average age of inventory (AAI), average collection period (ACP)
and average payment period (ACP) have an inversely significant impact towards
profitability. Based on the findings it shows that profitability of firms listed in
Indonesia Stock Exchange is affected by cash conversion cycle. |
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