THE ROLE OF FIRM SIZE AS A MODERATING VARIABLE ON THE EFFECT OF WORKING CAPITAL MANAGEMENT ON THE PROFITABILITY OF PUBLIC COMPANIES IN INDONESIA
This study aims to examine the effect of working capital management on profitability with firm size as a moderating variable in Indonesian companies listed on the Indonesia Stock Exchange for the period 2017-2021. Profitability is measured by return on assets (ROA). The independent variables used in this study are working capital turnover (WCT) and cash conversion cycle (CCC) which represent working capital management. The control variables used are sales growth, cash flow and long term debt. The samples used in this study were 57 companies in Indonesia listed on the Indonesia Stock Exchange for the period 2017-2021 using purposive sampling method. The method of analysis is panel data regression with moderate regression analysis (MRA) which has previously passed the classical assumption test. Fixed effect was selected in the classical assumption test analysis. The results that working capital turnover (WCT) has a positive and significant effect on profitability (ROA). Cash conversion cycle (CCC) has a negative and significant effect on profitability (ROA). Firm Size can moderate the relationship between WCT and profitability (ROA) and also Firm Size can moderate the relationship between CCC and profitability (ROA).
Working Capital Management, Profitability, Working Capital Turnover.