EFFICIENCY OF WORKING CAPITAL ON COMPANY PROFITABILITY IN GENERATING ROA (CASE STUDIES IN CV. TOOLS BOX IN SURABAYA)

Abstract

The purpose of this study is to investigate the influence of the working capital efficiency ratio toward profitability. The working capital efficiency ratios used in this study are a current ratio, a receivable turnover, and a net working capital turnover. On the other hand, corporate profitability used in this study is measured by return on assets (ROA). This research is conducted as the case study in a company, namely CV. Tools Box. The data are the monthly financial reports from January 2008 until December 2009. For data analysis, the researcher used a multiple regression analysis, t-test, F-test, coefficient of determination, partial correlation, and classical assumptions. The result of this study indicates that only partially net working capital turnover has a significant effect on ROA. In Addition, the current ratio, receivable turnover, and net working capital turnover simultaneously has a significant effect on ROA.