THE EFFECT OF WORKING CAPITAL MANAGEMENT ON PROFITABILITY: CASE STUDY OF A MANUFACTURING COMPANY LISTED ON THE INDONESIAN STOCK EXCHANGE
Keywords:
Working Capital Management, Profitability, Manufacturing CompaniesAbstract
This research aims to examine the effect of working capital management on the profitability of manufacturing companies listed on the Indonesia Stock Exchange (BEI). This study uses a literature review method, where secondary data taken from company financial reports and previous research results are processed and analyzed. The main focus of the research is to understand how the management of current assets and current liabilities can influence the level of profitability as measured by financial indicators such as Return on Assets (ROA) and Return on Equity (ROE). The research results show that effective working capital management, including optimal management of accounts receivable, inventory and accounts payable, has a significant positive impact on the company's financial performance and profitability. These findings underline the importance of efficient working capital management strategies in generating added value for companies and increasing competitiveness in the manufacturing industry. Thus, the practical implications of this research confirm that companies need to consider working capital management policies as an integral part of their strategic financial planning.
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