Jurnal Penelitian
Vol 20, No 1 (2023): June 2023

The determinants of profitability in the plantations and crops industry in Indonesian companies

Maria Dewinta Ture (Department of Accounting, Faculty of Economics and Business, University of Merdeka Malang)
Diyah Sukanti Cahyaningsih (Department of Accounting, Faculty of Economics and Business, University of Merdeka Malang)



Article Info

Publish Date
29 Aug 2023

Abstract

This study aims to determine the effect of working capital turnover, company size, and sales growth on the profitability of plantation and food crop sub-industrial companies listed on the Indonesia Stock Exchange. This study employs quantitative analysis, utilizing financial data covering a five-year period for 25 listed companies. Company size is measured using total assets, while sales growth is evaluated based on the year-on-year revenue growth rate. Working capital turnover is calculated as the ratio of net sales to working capital. The findings reveal that firm size exhibits a significant negative effect on profitability, implying that larger firms may face challenges in optimizing cost efficiency. Conversely, sales growth shows a significant positive effect on profitability, this indicates that companies that experience higher revenue growth tend to achieve better profit margins. However, this research does not find a significant relationship between working capital turnover and profitability, which suggests that effective working capital management may not be an important determinant of profit margins in plantation and food crop sub-industry companies in the Indonesian market. These results provide valuable insights for investors, managers and policy makers in understanding the key drivers of profitability in this particular industry segment and can help make informed financial decisions.

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Journal Info

Abbrev

jp

Publisher

Subject

Economics, Econometrics & Finance Engineering Languange, Linguistic, Communication & Media Law, Crime, Criminology & Criminal Justice Social Sciences

Description

Jurnal Penelitian: Published by the Institute for Research and Community Service (LPPM) the University of Merdeka Malang as a forum for research publications that support the development of science, technology, economy, environment, and society in empowering the community. The scope of the journal ...