THE EFFECT OF CASH TURNOVER AND INVENTORY TURNOVER TOWARDS RETURN ON EQUITY (ROE) IN “SEGAR JAYA”

Abstract

The purpose of this research is to know whether cash turnover and inventory turnover affect ROE, either partially or simultaneously. This research uses the monthly financial report of Segar Jaya between January 2011 and July 2013, which consists of profit and loss statement and balance sheet, as the population and sample of this research. To collect those samples, the author uses documentary study method. In this research, the author uses three variables, which are cash turnover and inventory turnover as independent variables and ROE (Return On Equity) as dependent variable. There are several methods used by the author to analyze the data. Those methods are descriptive analysis, multiple linear regression, F-test, t-test, coefficient correlation, coefficient determination, normality test, multicollinearity test, autocorrelation test, and heterocedasticity test. The result of this test shows that cash turnover affects ROE partially and significantly. It can be seen from the significant value of 0.045 (< 0.05). This condition also happens in inventory turnover. Result shows that the significant value is 0.010 (< 0.05), which means that inventory turnover significantly and partially affects ROE. Cash turnover and inventory turnover also significantly and simultaneously affect ROE as the dependent variable. It can be seen from the significant value, which is 0.000 (< 0.05).