Influence of Working Capital Management and Policy to Profitability of Retail Trading Sector in Indonesia

Working Capital (WC) is an important aspect of any firms because of its correlation to risk (liquidity) and return (profitability). This research examines the influence of WC Management and Policy (WCMP) to profitability of 21 listed retail trading sector firms in Indonesia from 2011-2020 using panel data regression. In this research, WC Management (WCM) is measured by Cash Conversion Cycle (CCC) and its components which are Days Sales Outstanding (DSO), Days Inventory Outstanding, and Days Payable Outstanding (DPO); WC Policy is measured current assets divided by total assets or referred to as WC Investment Policy (WCIP) and current liabilities divided by total assets or referred to as WC Financing Policy (WCFP); and profitability is measured by Earnings Before Interest, Tax, Depreciation, and Amortization Margin (EBITDAM). The results show that firms can increase EBITDAM by shortening CCC, primarily through shortening DIO and lengthening DPO. Further, firms may improve EBITDAM by adopting a conservative WC Policy instead of an aggressive one, which means having higher current assets and lower current liabilities with respect to total assets.

KEBIJAKAN PEMBAGIAN DIVIDEN KAS DI PERUSAHAAN SUB SEKTOR PERDAGANGAN ECERAN

ABSTRAKTujuan dari penelitian ini adalah untuk menganalisis pengaruh laba bersih, arus kas operasi, investment opportunity set, dan firm size terhadap dividen kas. Penelitian ini dilakukan pada perusahaan sub perdagangan eceran yang terdaftar di Bursa Efek Indonesia periode 2015–2019. Sampel terdiri dari lima perusahaan yang dipilih dengan menggunakan metode purposive sampling. Penelitian ini menggunakan uji regresi linear berganda untuk menguji hipotesis. Hasil pengujian menunjukkan bahwa laba bersih berpengaruh positif terhadap dividen kas, sedangkan arus kas operasi, investment opportunity set, dan firm size tidak berpengaruh. Hal ini dapat menjadi perhatian bagi perusahaan untuk terus meningkatkan kinerja perusahaan dalam menghasilkan laba bersih. Dengan laba yang tinggi, para investor akan lebih tertarik untuk menginvestasikan dananya. ABSTRACTThe purpose of this study is to analyze the effect of net income, operating cash flow, investment opportunity set, and firm size on cash dividends. This research was conducted on sub-retail trading companies listed on the Indonesia Stock Exchange for the 2015–2019 period. The sample consists of five companies, selected using the purposive sampling method. It uses multiple linear regression to test the hypotheses. Results show that net income affects positively cash dividends. While cash flow, investment opportunity set, and firm size does not affect cash dividends. This can be a concern for the company to continue to improve the company's performance in generating net income. With high profits, investors will be more interested in investing their funds.

PENGARUH DEWAN KOMISARIS INDEPENDEN, KEPEMILIKAN MANAJERIAL DAN LEVERAGE TERHADAP MANAJEMEN LABA

Earnings management arises because of pressure from both inside and outside the company. Several factors that can influence management include: independent board of commissioners, managerial ownership and leverage. This study aims to determine the effect of independent commissioners, managerial ownership and leverage on earnings management in retail trading sub-sector companies listed on the Indonesia Stock Exchange for the 2015-2019 period partially and simultaneously. This research was conducted using a quantitative descriptive method with a population of 27 retail trading sub-sector companies that are incorporated in the Indonesia Stock Exchange for the 2015-2019 period and taken as many as 7 companies using purposive sampling. retail trade sector for the 2015-2019 period. Based on the results of the t-test (partial) the independent board of commissioners has a value of -tcount < -ttable where -3.520 < -2.03951 with a sig value of 0.001 <0.05, meaning that the independent board of commissioners has a negative and significant effect on earnings management. Managerial ownership has a value of -tcount < -ttable where -4.364 < -2.03951 with a sig value of 0.000 <0.05, meaning that managerial ownership has a negative and significant effect on earnings management. Leverage has tcount > ttable where 3.188 > 2.03951 with a sig value of 0.003 < 0.05, meaning that leverage has a positive and significant effect on earnings management and the results of the F (simultaneous) test Fcount > Ftable and a value where 12.940 > 2.90 with sig 0.000 < 0.05 means that the board of commissioners is independent, managerial ownership and leverage affect earnings management

THE EFFECT OF CASH CONVERSION CYCLE ON THE PROFITABILITY OF THE RETAIL TRADE SECTOR COMPANIES

One of the company's goals is to increase company value. In order to achieve these goals the company must increase its profitability. To increase profitability, companies have to manage working capital effectively and efficiently. The effectiveness of working capital management can be measured using the Cash Conversion Cycle (CCC). CCC consists of Days Sales Outstanding (DSO), Days Sales Inventory (DSI), and Days Payable Outstanding (DPO). This study aims to determine the effect of the CCC and its components on company profitability. The type of data used in this study is secondary data which are collected from of corporate financial reports. The population in this study are retail trading companies listed on the Indonesia Stock Exchange during the 2015-2019 period. The data analysis method used in this study is the multiple linear regression method for panel data and simple linear regression for panel data. The results showed that partially, DSO, DSI, and CCC had a negative effect on company profitability. Meanwhile, the DPO has a positive effect on company profitability. Simultaneously, DSO, DSI, and DPO have an effect on profitability. Therefore, companies need to pay attention to the CCC and its components (DSO, DSI, and DPO) and manage it properly.

Background Noise? TV Advertising Affects Real-Time Investor Behavior

Using minute-by-minute TV advertising data covering some 300 firms, 327,000 ads, and $20 billion in ad spending, we study the real-time effects of TV advertising on investors’ searches for online financial information and subsequent trading activity. Our identification strategy exploits the fact that viewers in different U.S. time zones are exposed to the same programming and national advertising at different times, allowing us to control for contemporaneous confounding events. We find that an average TV ad leads to a 3% increase in EDGAR (Electronic Data Gathering, Analysis, and Retrieval) system queries and an 8% increase in Google searches for financial information within 15 minutes of the airing of that ad. These searches translate into larger trading volume on the advertiser’s stock, driven primarily by retail investors. The findings on retail investor ad-induced trading are corroborated with hourly data from Robinhood, a popular retail trading platform. We also show that ads induce searches and trading of companies other than the advertiser, including of close rivals. Altogether, our findings suggest that advertising originally intended for consumers has a nonnegligible effect on financial markets. This paper was accepted by Karl Diether, finance.

Uncovering Retail Trading in Bitcoin: The Impact of COVID-19 Stimulus Checks

In April 2020, the US government sent economic impact payments (EIPs) directly to households, as part of its measures to address the COVID-19 pandemic. We characterize these stimulus checks as a wealth shock for households and examine their effect on retail trading in Bitcoin. We find a significant increase in Bitcoin buy trades for the modal EIP amount of $1,200. The rise in Bitcoin trading is highest among individuals without families and at exchanges catering to nonprofessional investors. We estimate that the EIP program has a significant but modest effect on the US dollar–Bitcoin trading pair, increasing trade volume by about 3.8 percent. Trades associated with the EIPs result in a slight rise in the price of Bitcoin of 7 basis points. Nonetheless, the increase in trading is small compared to the size of the stimulus check program, representing only 0.02 percent of all EIP dollars. We repeat our analysis for other countries with similar stimulus programs and find an increase in Bitcoin buy trades in these currencies. Our findings highlight how wealth shocks affect retail trading.

ANALYSIS OF COST OF SALES AND SALES ON NET INCOME

This study aims to analyze The cost of sales and sales of net income in retail trading companies listed on the Bursa Efek Indonesia. The population and sample in this study are the financial statements of 12 retail trading companies listed on the Bursa Efek Indonesia for the period 2016-2018. This research technique uses classic assumption test, multiple linear regression analysis, hypothesis test and determination coefficient test. The collection technique uses the documentation and literature review methods. And after the data was collected, the test analysis in this study was carried out with the help of IBM SPSS 26 for Windows. Based on the results of the F test that The cost of sales and sold together has a simultaneous effect on net income in 12 retail trading sub-sector trading companies listed on the Bursa Efek Indonesia.