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p-ISSN: 2715 - 0127

e-ISSN: 2715 - 0135

Journal of Management and Business,Volume 3, No. 1, July 2021

THE EFFECT OF ACCOUNTS RECEIVABLE TURNOVER AND INVENTORY ONRETURN

ON ASSETIN AGRIBUSINESS
COMPANIES THAT GO PUBLIC
Diana Setiyo Dewi
Jayakarta College of Economics
diana-wati@stie.jayakarta.ac.id

ABSTRACT

The first aim of this research was to determine the effect of trade receivables turnover
onReturn on Assets (ROA)in Agribusiness companies that went public for the 2017-2019 period.
Second, to determine the effect of inventory turnover onReturn on Assets (ROA) in Agribusiness
companies that went public for the 2017-2019 period. Third, to determine the influence of trade
receivables and inventory simultaneously onReturn on Assets (ROA)in Agribusiness companies
that went public for the 2017-2019 period. This research uses secondary data where researchers
use documentation data located inIndonesian Capital Market Directory (ICMD) 2017-2019. This
type of research is quantitative. The results of the research show that trade receivables turnover
has a negative effect onreturn on assetswith t count > t table or 1.289 > -2.000758. Inventory
turnover has no effect onreturn on assetswith t count < t table or 1.289 > -2.000758.Accounts
receivable and inventory turnover have no effect on return on assetswith f count > f table or
2.383 > 3.17. It is hoped that in developing empirical financial management knowledge
regarding trade receivables turnover and inventory turnoverreturn on assetscan add more
independent variables and have an influence onreturn on assets,so that the results can be used
for the world of education and also for business actors in carrying out management activities for
their company.

Keywords: Accounts Receivable Turnover, Inventory,Return on Assets

ABSTRACT
The first objective of this study was to determine the effect of accounts receivable turnover on
return on assets (ROA) in Go Public Agribusiness companies for the 2017-2019 period. Second, to
determine the effect of inventory turnover on return on assets (ROA) in Go Public Agribusiness
companies for the 2017-2019 period. Third, to determine the effect of accounts receivable and
inventory simultaneously affecting return on assets (ROA) in agribusiness companies that went public
in the 2017-2019 period. This study uses secondary data where researchers use documentation data
in the Indonesian Capital Market Directory (ICMD) 2017-2019. This type of research is quantitative.
The results showed that accounts receivable turnover had a negative effect on return on assets.
Inventory turnover has no effect on return on assets. Accounts receivable and inventory turnover
have no effect on return on assets, with t count <t table or 1.289 > -2.000758. Accounts receivable and
inventory turnover have no effect on return on assets with f count > f table or 2.383 > 3.17. It is
expected that in developing financial management science that empirically concerns the turnover of
trade receivables and the turnover of inventory to return on assets can add more independent
variables and affect the return on assets, so that the results can be used for the world of education
and also for businesses in carrying out management activities of the company's management.

Keywords: Accounts Receivable Turnover, Inventory, Return On Assets

36
I. Introduction The inventory is stored in the warehouse.
Inventory turnover in a company shows
Factor First Which influential
the company's performance in its
toreturn on assetsnamely the turnover of
operational activities. The higher the
trade receivables. Accounts receivable
inventory turnover rate, the greater the
turnover is a ratio used to measure how
possibility that the company will make a
long it takes to collect receivables into
profit. Likewise, if the inventory turnover
cash during a certain period. The high and
rate is low, it is likely that the company will
low turnover of trade receivables has a
make a profit.
direct effect on the size of the funds
invested in receivables. If the receivables
The author researches company Which
turnover rate is high, it means that the
engaged in the Agribusiness sector which
return of funds embedded in receivables
is listed on the Indonesian Stock
takes place quickly so that the risk of
Exchange, especially those that have gone
losses on receivables can be minimized.
public as research objects. These
Without accounts receivable and
agribusiness companies in their business
inventory, how can a company run its
activities are producing CPO (palm oil) and
business and make a profit. The higher the
PK (palm kernel) into industrial and
trade receivable turnover value shows that
consumer products such as cooking oil,
the company has implemented a good
margarine, shortening, because these
and efficient receivables collection policy.
companies are companies that produce
Likewise with inventory turnover, if the
basic materials that are really needed by
inventory turnover rate in the company is
the community. so inventory turnover is
high, the company will get an increase in
relatively high. The inventory sold results
sales, automatically if sales increase, the
in trade receivables due to credit sales,
company's profits will also increase.
relatively high inventory and combined
with relatively high trade receivable
The second factor that influences return
turnover which will affect net profit,
on assetsnamely inventory turnover.
especially in measuring asset
Inventory turnover is inventory turnover
effectiveness.
showing how many times the company's
Based on the description above, the
inventory is replaced or sold during a certain
authors of this research will examine: “Effect
period. The inventory turnover ratio
of Accounts Receivable Turnover and
measures how many times a company's
Inventory onReturn on Assets (ROA) on
inventory has been sold during a certain
Agribusiness Companies that Go Public
period, while the number of days of
for the 2017-2019 Period”.
inventory shows how long it lasts

37
II. LITERATURE REVIEW
Agency theorybase the relationship
contract between internal members
company, withprincipal(principal) and
agent(agent) as the main actor. The
principal is the party who gives the
mandate to the agent to act on behalf of
the principal, while the agent is the party
who is given the mandate by the principal
to run the company. The agent is obliged
to be responsible for what the principal
has entrusted to him. An agency
relationship arises when one or more
principals employ an agent to provide a
service and then delegate decision-making
authority to the agent. This principal and
agent relationship in the company is
manifested in the relationship between
managers and shareholders. Managers
are considered as agents and
shareholders as principals. This can give
rise to a contract between the principal
and agent. Managers as company
managers know more about internal
information and the company's future
prospects than owners (shareholders).
1.Factors that Influence the Size of
Receivables
The turnover of receivables owned
by a company has a close relationship with
the number of credit sales, so that the
company's efforts to control receivables
are carried out through credit policies,
namely paying attention to the amount of
credit sales policies carried out by the
company regarding its production results.
According to Bambang Riyanto (2016: 85),
there are several factors that influence the
size of receivables, namely:
38
a. Volume of Credit Sales The
greater the volume of credit sales
made, the greater the investment made in
receivables. The greater the volume of
credit sales each year means that the
company must provide a greater
investment in receivables. The greater the
amount of receivables means the greater
the risk, but at the same time it also
increases the profitability.
b. Condition Payment Sale
Credit
Credit sales payment terms can be
strict or lenient. If a company sets strict
payment terms, it means that the
company prioritizes credit safety over
profitability. The longer the credit
payment deadline means the greater the
amount of receivables.
c. Provisions regarding Credit
Limitations
Restrictions credit Also must
determined by the company in providing
credit. The higher the credit limit set for
each subscription, the greater the funds
invested in receivables.
d. Policy in Collecting Receivables
The company's receivable
collection policy can be carried out actively
or passively. If the company implements
an active receivables collection policy,
meaning the company carries out its own
collection, the company will incur greater
costs. However, this is different if the
company implements passive collection of
receivables, then the investment invested
in receivables will be greater.
e. Paying Habits of Customers
This payment habit concerns
utilizationdiscount periodby subscribers,
meaning the more these subscribers take
advantage discount period, the smaller the
investment made in receivables.
2. Advantages and WeaknessesReturn on
Assets(ROA)
As forexcessand weaknessReturn on negative in period

Assetsare as follows: length.

a. The advantages of ROA include
the following: III. RESEARCH METHODS

1) ROA is easy to calculate and Types of research based on the objectives

used in study
understand. This:

2) Represents tool gauge 1. Descriptive Research

performance management Which The definition of descriptive research

sensitive to every is research that emphasizes efforts to

influence circumstances finance describe events, occurrences, symptoms

company. that are currently occurring. The

3) Management emphasize descriptive method attempts to describe

his attention on acquisition and identify why, what and how a

maximum profit. phenomenon or event can occur.

4) As a benchmark for management 2. Explanatory Method (Explanatory)

achievements in This type of explanatory research

utilise assets Which (often called explanatory or explanatory =

owned by the company For explanatory in nature, there is no

earn a profit. standard word yet) or also called

5) Encourage achieved objective

verification research aims to test a truth

company. through testing hypotheses about cause

6) As a tool for evaluating and effect between the various variables

policies
implementation studied. In this case, there is already a

management. hypothesis. This explanatory research can

b. Weakness ROA among them be carried out if knowledge about the

as follows: problem is sufficient, meaning that there

1) Not encouraging are already several theories and various

management to add assets if empirical studies that test certain

the expected ROA value turns hypotheses. So this type of research is

out to be too high. always based on a hypothesis obtained

2) Management tends to focus from a particular theory

on short-term goals, not Types of research based on the

long-term goals, so methods used in this research:

tend
take decision period
1. Correlational Research

short Which more The definition of correlational

profitable but has consequences research is research carried out in this way

39
connecting one variable with another The aim is to test the hypothesis that has been

variable to understand a phenomenon or formulated

event, by determining the level or degree
of relationship between these variables.
This method is very suitable for use when
conducting research on complex and
complicated variables that cannot be
resolved using experimental methods.
The level of relationship is shown by
the correlation coefficient value which
functions to compare the variability of
measurement results for these variables.
Knowledge about the level of relationship
is expected to increase understanding of
the factors in the complex characteristics
of a phenomenon.
2. Comparative Research (Ratio)
Based on the location, the type of
research used is library research (Library
Research), library research is secondary
data collection carried out by reading
books, magazines and other data sources
in the library. So, data (information)
collection efforts are carried out in places
where books and other references are
stored. Literature study is needed as a way
to understand new phenomena that occur
that cannot yet be understood, then with
this literature study we will be able to
understand these symptoms. So in dealing
with a symptom that occurs,
The data collection method used in
this research is the documentation method,
namely using documentation data located in

Research using the ratio method is research

Indonesian Capital Market Directory(ICMD)

to compare two objects in order to measure the

for 2017-2019. As well as data regarding

level of suitability of a variable. Generally, this

financial report information for agribusiness

ratio hypothesis is used by undergraduate

companies that have gone public on the IDX

programs majoring in accounting.

from the site www.idx.co.id.

Based on the nature of the data, the

IV. RESULTS AND DISCUSSION
type of research used is quantitative
The population in this research is all
research. Quantitative research, namely
manufacturing companies listed on the IDX.
quantitative methodology as a research
Sampling in this research used techniques
process that produces data in the form of
purposive samplingwhich is a non-random
numbers and is generally analyzed using
sample selection method whose
descriptive or inferential statistics.
information is obtained using
Quantitative research methods are used
consideration certain
to research populations or samples using
(Indriantoro and Bambang, 2012:56). The sample in
research instruments
this research is part of the entire sample

40
agribusiness companies that went public in the Accounts receivable turnover has a
2017-2019 period. negative effect onreturn on assetsin
In study This variable agribusiness companies that went public
dependent or bound (Y) isreturn on assets, in the 2017-2019 period. The higher the
then the independent or independent receivables turnover, the higher thereturn
variables are trade receivables and inventory on assetsIn fact, it will decrease further,
turnover. The results of correlation and this is due to the risk factor of bad debts
multiple regression analysis using SPSS are and the factor of production goods being
as follows: easily damaged. This results in returned
Table 4.9 Correlation Coefficient Results goods and unpaid receivables.
Simultaneous This can be seen from the results of

R R Square Adjusted R Square descriptive statistics which show an average

value of 13.65367 from a minimum value of
0.292
0.085 0.050 0.007 and a maximum value of 71.030 and a
a
value of varianceamounting to 198,535. This
value shows that the average results of
descriptive statistics tend to be in the upper
Based on the results of the correlation coefficient
average, meaning that in general high
Simultaneously, it can be seen that the correlation
receivables turnover is followed by return on
that occurs between the independent variable and
assetswhich is decreasing.
the dependent variable is known to have a value of R
The results of this research are in
= 0.292, this indicates that the independent
accordance with the research results of Niati,
variables of accounts receivable turnover and
et al (2019), Ramadani and Rasyid (2019), I
inventory have a relationship with the dependent
Gusti Ayu Agung Mirah Sanjiwani and Ketut
variable. return on assets(Y). The value of 0.292 is in
Alit Suardana (2019), Elvi Bethari Saragih and
the range of 0.20 to 040, meaning the correlation
Joana L. Saragih (2018) and Elvi Yanti and Lidya
between trade receivables and inventory turnover
Martha (2020) states that there is a
withreturn on assetscategorized as weak
relationship between trade receivables
correlation. The relationship that occurs is positive
turnover andreturn on assets.
and in the same direction with a weak level of

relationship.
2. Effect of Inventory Turnover on
Return on Assets
Discussion
Inventory turnover has no effect on
1. Effect of Accounts Receivable
return on assetsin agribusiness companies
Turnover onReturn on Assets
that went public in the 2017-2019 period.
The faster inventory turns over

41
warehouse Not yet Of course followed with The significance coefficient is 0.002 which is

enhancementreturn on assetsbecause it is possible that smaller than 0.05, so it can be concluded that

the sale of the goods has not been paid for and becomes a there is no influence on trade receivables and

receivable from the company. inventory turnover onreturn on assetsin

This can be seen from the results of agribusiness companies that went public in the
descriptive statistics which show an average 2017-2019 period.
value of 9.72822 from a minimum value of Based on the results of the coefficient of

0.010 and a maximum value of 46.253 and a determination, it can be seen that the correlation

value ofvariance amounting to 9.72822. This between the independent variable and the

value shows that the average results of dependent variable is known to have a value of r

descriptive statistics tend to be at the = 0.292a, this indicates that the independent

bottom of the average, meaning that in variables trade receivable turnover and inventory

general the faster inventory turnover is not have a relationship with the dependent variable

necessarily followed by an increasereturn on return on assets(Y). The relationship that occurs

assets. is positive and in the same direction with a weak

To measure inventory efficiency, it is level of relationship.

necessary to know inventory turnover ( Based on the results of the multiple linear

inventory turnover) which occurs by regression analysis, it is known that the

comparing the cost of goods sold (COGS) coefficient of determination is denoted by

with the average value of inventory held. adjusted R2the magnitude is 0.339. This means
Inventory turnover shows how many variablereturn on assetscan be explained by

times the funds embedded in inventory the trade receivables and inventory turnover

are rotated (replaced) in a period, variables which are reduced in the model by

(Munawir, 2014:35). 5%, or in other words the effective contribution

The results of this research are in accordance (contribution) of the independent variable to

with the research results of Ramadani and Rasyid the variation (change)return on assets(Y) of 5%.

(2019) and Septian (2018) which reveal that there is Variationreturn on assets(Y) can be explained

no influence between inventory turnover and return by variations in the two independent variables,

on assets. so the remainder is (100% - 5% = 95%) return

on assetsexplained by other variables not
3. Effect of Accounts Receivable Turnover included in this research model, for example
and Inventory onReturn on Assets cash turnover.

The results of this research are in

Accounts receivable and inventory turnover
accordance with the research results of Niati, et
have no effect onreturn on assets. Based on the
al (2019), I Gusti Ayu Agung Mirah Sanjiwani and
calculated F value, it is smaller than table F
Ketut Alit Suardana (2019), Elvi Bethari Saragih
(12.383>3.18), as well as based on the value
and Joana L. Saragih (2018) and Elvi Yanti and

42
Lydia Martha (2020) states that there is b. The sig value of receivables turnover on

the relationship between accounts receivable turnover return on assets shows a value of 0.043
and inventory withreturn on assets. <0.05, so Ho is accepted. This means that
there is a significant influence between
trade receivables and return on assets."
V. CONCLUSION
c. The partial correlation value between trade
Based on data processing and analysis
receivables turnover and return on
of the influence of trade receivables and
assets shows a figure of -0.236, based
inventory turnover on return on assets in
on data ranging from -0.20 to -0.40, thus
agribusiness companies that went public for
the correlation between trade
the 2017-2019 period and based on
receivables turnover and return on
empirical evidence obtained, it was
assets is categorized as a weak
concluded that:
relationship with a negative direction.
1. Trade receivables turnover has a
negative effect onreturn on assetsin
2. Turnover supply No
influence onreturn on assets in
agribusiness companies that went
agribusiness companies that went
public in the 2017-2019 period. The
public in the 2017-2019 period.
higher the receivables turnover, the
The research values show the
higher thereturn on assetsIn fact, it
will decrease further, this is due to following figures:

the risk factor of bad debt and the

a. Top value of t count < t table or

factor of production goods being 1.289 < 2.00758, meaning Ho is

accepted or Ha is rejected. Thus the
easily damaged. This results in
significant regression coefficient or
returned goods and unpaid
Inventory turnover variable (X2)
receivables.
does not have a significant effect
The research values show the
on the return on asset (Y) variable.
following figures:
a. -t value count < -t table or - b. Sig value of inventory turnover with

2.074 < -2.00758 and Probality return on assetsshows a value of

< 0.05 or 0.043 < 0.05, meaning 0.203 > 0.05, then Ho is accepted.

Ho is rejected or Ha is This means there is no influence

accepted. Thus, the regression between inventory and return on

assets."
coefficient is significant or the
c. Partial correlation between
trade receivable turnover
inventory turnover corresponds to
variable (X1) really has a
return on assetsshows a value of
significant effect on the return
0.091 based on data ranging from
on asset (Y) variable.
0.00 to 0.20, thus the correlation

43
 between rotation supply
withreturn on assetsin the category of
very weak relationship with a positive
direction.
3. Accounts receivable and inventory
turnover have an effect on return
on assets. with the following
details:
a. Calculated F value > F table or 12.383
> 3.18, meaning Ho is rejected
or Ha is accepted. Thus, the
significant regression coefficient
or variable accounts receivable
turnover (X1) and inventory
turnover (X2) simultaneously
have a significant effect on the
variablereturn on assets(Y).
b. The sig F value between
accounts receivable and
inventory turnover return on
assetsproduces a value of
0.002 <0.05, meaning the debt
turnover value (X1) and
inventory (X2) simultaneously
influencereturn on assets.
c. The R value = 0.292, this indicates
that the independent variables
are trade receivables and
inventory turnover own
relationship to variable
tied to return on assets (Y). The value
of 0.292 is in the range of 0.20 to 040,
meaning that the correlation between
trade receivables and inventory
turnover and return on assets is
categorized as a weak correlation.
44
d. The coefficient of determination
value = 0.085, which means this
value shows that the contribution
of accounts receivable turnover
and inventory turnover toreturn
on assetsis 8.5%.
Suggestion
Based on the conclusions above
The author provides suggestions that may
be useful as a basis for consideration or
input for companies to overcome the
deficiencies/weaknesses in implementation,
namely as follows:
1. Suggestions for knowledge developers
It is hoped that this research will be
useful in developing empirical financial
management knowledge regarding trade
receivables turnover and inventory
turnoverreturn on assets,so that it can be
used by business actors in carrying out
management activities of their companies,
especially agribusiness companies that go
public ", further research is expected to
add independent variables that influence
return on assetsfor example, cash
turnover as in Okiawan's (2018) research.
2. Suggestions for Operations
After observing and analyzing the
research results, the author sees things
that can be used as input for companies,
especially agribusiness companies that go
public," from the research results.
showing exists influence in
managing cash turnover of trade
receivables and inventory turnover
towards the company's return on assets.
So that these companies can optimize
managerial management in managing
their cash flow so that they can anticipate
undesirable things in the course of
managing the company.
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