Working Capital Management And Corporate Performance: Analysis Of Manufacturing Companies In Index Lq 45 Indonesian Stock Exchange (An Empirical Study of Indonesian Manufacturing Companies in Index LQ 45 Indonesian Stock Exchange for the Period of 2010-2014)

Abstract

Currently, the business moves fast with a blink of an eye, in which every action must be done fast and efficiently. The parts of entity needed in the most to be treated fast are current assets and current liabilities, called as working capital. Working capital of entity needs to be managed efficiently to face the business problems and to improve the performance of firm. This study aims to investigate the relationship between Working Capital Management and firm’s performance. The population of this study is all manufacturing companies ever listed in Index LQ 45 Indonesian Stock Exchange (IDX). This study uses purposive sampling; which sample was only taken from manufacturing companies listed in period of August – January from year 2010 – 2014. This study sample consists of 54 companies fulfilling the sampling criteria. Regression was mainly used by this study. The findings suggest that generally, there is a negative and significant relationship between Working Capital Management’s measurements and profitability of manufacturing companies listed in Index LQ 45 Indonesian Stock Exchange (IDX) by using regression. This concludes that efficient Working Capital Management improves the firm’s performance