The influence of net working capital and capital structure on profitability in manufacturing companies in the consumer goods industry sector listed on the Indonesia stock exchange

Dessy Rachma Putri; Isnurhadi Isnurhadi; Marlina Widiyanti; Mohamad Adam

doi:10.21744/ijbem.v5n4.2030

Authors

Dessy Rachma Putri
dessyrachmap@gmail.com
Master of Management, Sriwijaya University, Palembang, Indonesia
Isnurhadi Lecturer of Magister Management, Economic Faculty, Sriwijaya University, Palembang, Indonesia
Marlina Widiyanti Lecturer of Magister Management, Economic Faculty, Sriwijaya University, Palembang, Indonesia
Mohamad Adam Lecturer of Magister Management, Economic Faculty, Sriwijaya University, Palembang, Indonesia

Keywords:

capital structure, Indonesia stock exchange, manufacturing industry, net working capital, profitability

Abstract

The manufacturing industry sector in the goods and consumption sub-sector has an attraction for investors to invest in companies so that to increase the profitability value of the company, several indications are needed to achieve the goal by maintaining the company's assets and assets and always paying attention to the company's debt and equity finance. This study examines 15 food and beverage sub-sector manufacturing companies listed on the Indonesia Stock Exchange (IDX) in 2016-2021, using panel data regression analysis techniques that are time series and cross section to examine the relationship between model variables. The results of the analysis study were obtained where the selection of the Chow test model obtained the Common Effect Model (CEM) selection, while the Hausman test had doubtful results and the Langrange Multiplier test selected the Common Effect Model (CEM) model, while from the estimation results of panel regression data using the option Common Effect Model in which the variables Net Working Capital (0.013) and debt to equity ratio (DER) (0.000) have a positive influence while the debt to asset ratio (DAR) (0.003) has a significant negative effect. -variable with value (10.84 > 3.29).

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