The Effect of Working Capital Turnover and Receivable Turnover on Profitability: Case Study on PT. Merck Tbk

With the growing world ofbusiness, the competition between similar companies getting tighter. To maintain the viability of a company required a good management of resources conducted by the management. Account Receivable turnover and working capital are very important for a company because it is the elements in measuring the proitability of the company. The purpose of this research is to know: (1) the effect of account receivable turnover to company proitability, (2) the effect ofworking capital turnover to the company, (3) the effect of account receivable turnover and working capital turnover to company proitability. The research method used is quantitative analysis, correlation coeficient test, the coeficient of determination test and hypothesis test. The data used in this study is secondary data sourced from inancial statement PT. Merck Tbk period 2009-2013 obtained directly from the respondent. The results based on multiple linear regression tests showed that simultaneously turnover of account receivable and working capital turnover did notsigniicantly affect company proitability (5.603 < 9.55). Partially, the account receivable turnover does not signiicantly affect the proitability of the company (2.298 < 3.182) and the working capital turnover does not signiicantly affect the proitability of the company (3.003 < 3.182). So, it can be said the hypothesis in this study was rejected.

With the growing world of business, the competition between similar companies getting tighter. To maintain the viability of a company required a good management of resources conducted by the management. Account Receivable turnover and working capital are very important for a company because it is the elements in measuring the pro itability of the company. The purpose of this research is to know: (1) the effect of account receivable turnover to company pro itability, (2) the effect of working capital turnover to the company, (3) the effect of account receivable turnover and working capital turnover to company pro itability. The research method used is quantitative analysis, correlation coef icient test, the coef icient of determination test and hypothesis test. The data used in this study is secondary data sourced from inancial statement PT. Merck Tbk period 2009-2013 obtained directly from the respondent. The results based on multiple linear regression tests showed that simultaneously turnover of account receivable and working capital turnover did not signi icantly affect company pro itability (5.603 < 9.55). Partially, the account receivable turnover does not signi icantly affect the pro itability of the company (2.298 < 3.182) and the working capital turnover does not signi icantly affect the pro itability of the company (3.003 < 3.182). So, it can be said the hypothesis in this study was rejected.

INTRODUCTION
Account receivable turnover and working capital turnover is very important for a company because it is the elements in measuring the pro itability of the company. Working capital is a short-term asset used by the company in operation to meet the needs of production, sales, distribution administration costs required before cash received from the sales of the company's inished products. Working capital is needed by every company to inance daily activities such as buying raw materials, paying salaries, paying debts, and paying other expenses. This working capital will continue to rotate every period within the company.
Working capital management should pay attention to several elements that make up the working capital such as the management of receivables. Effective and ef icient working capital management will be a measure of a company's success in the company's own survival over the long term.
In the management of working capital, the management of accounts receivable should be considered well because the receivables also raise various costs for the company. Therefore, a method is used to assess whether the bene it of having receivables greater than or less than the cost. Accounts receivable arise when the company sells goods or services on credit. Receivables cover all debts in the form of debt to individual business entitles or other collectible parties. The process starts with making decisions to give credit to customers, delivering goods, billing and inally receiving payment.
An account receivable is an important part of the company because it is part of the current asset and always in a state of rotation. This means that the receivables can be used as cash immediately with the longest period of one year. But there is often an incorrect collection of account receivable at a predetermined time, while each company needs suf icient cash low to play in the inancing of the company's day-to-day operations and meet current liabilities on time.
If the account receivable increase, it means pro itability of the company will increase also but at the same time the greater the risk that may occur on its liquidity. With the increasing proportion of credit sales from overall sales, will also increase the amount of investment in the form of receivables that can also increase the risk of non-payment of accounts receivable in the future. This happens because the sales of credit do not immediately generate cash, but it generates receivable subscriptions. Only later on the day of maturity occurs cash low comes from the collection of accounts receivable.
Each company aims to gain pro itability. Pro itability is the company's ability to earn a pro it. Pro itability in the company aims to measure the company's inancial performance, it needs a tool used to measure it. The tool used is inancial ratios. Financial ratios include the pro itability according to Syamsudin (2009:72-75) are gross pro it margin (GSM), operating pro it margin (OPM), net pro it margin (NPM), return on assets (ROA), return on investment (ROI), return on equity (ROE), return on common stock, earning per share (EPS), dividends per share, and book value per share. In this research, ROI is chosen as a tool to measure the company's ability to generate pro itability with the overall amount of company assets.
This research aims to determine the effect of working capital turnover and a receivable turnover on pro itability in PT. Merck Tbk period 2012-2016.

LITERATURE REVIEW Account Receivable Turnover
Account receivable is company bills to other parties arising from the sales of products or services on credit that have not been received the settlement. accounts receivable company in normal activities will be repaid in less than one year, so they are classi ied as current assets. As for those included in this receivable only bills that will be paid off with money. Therefore, the delivery of goods to be deposited (consignment) is not recorded as receivable until the time the goods have been sold. While receivables arising from the sale of installments will be separated into current assets and not smooth depending on the period of the installment. If more than one year then it is not reported in the current assets group but entered into another assets group.
There are many kinds of account receivables owned by a company, but based on the types and origins of account receivables, within the company can be classi ied into two main groups, as stated by Rudianto (2009:225) as follows: 1. Account Receivable are receivables arising from the sale of goods or services produced by the company. In normal business activities, accounts receivable will usually be paid off in less than one year, therefore account receivables are classi ied into current assets. 2. Non-trade receivables are receivables arising not as a result of the sale of goods or services produced by the company.
Account receivable turnover aims to know several times the receivables can be collected into the company. According to Munawir (2009:75) the formula used to calculate the turnover of receivable is as follows: Account Receivable Turnover =

Working Capital Turnover
According to Horne and Wachowiez (2008:314) the concept of working capital there is two kinds, namely net working capital and gross working capital. The net working capital is the difference between current assets and current liabilities, while current liabilities are irm investments in current assets. A similar opinion is put forward by Keown (2010:644), that traditionally, working capital is the total investment of a company in current assets, while net working capital is the difference between current assets and current liabilities.
Regarding the types of working capital, Taylor  Working capital is always in a state of operation or rotating within the company concerned in a business state. The working capital turnover period begins from the moment when cash is invested in the components of working capital until it is cash. The shorter the period means the faster the rotation or the higher the rotation. How long is the period of working capital turnover depending on how long the rotation of each component of the working capital. The formula used to measure working capital turnover is as follows: Working Capital Turnover =

Pro itability
Pro itability is a measure of the percentage used to assess the extent to which a irm is able to generate pro its at an acceptable level. Pro itability igures are expressed among others in the rate pro it before or after taxes, investment income, earnings, and pro it sales.
To assess the pro itability of a company that is with pro itability ratios. This ratio measures the ability of irms to generate pro it (pro itability) at the level of asset sales and capital stock. There are several pro itability ratios in accordance with interests of users of inancial statements.

Return on Equity (ROE): This ratio measures
the ability of irms to generate pro its based on certain share capital.
In this research, pro itability ratios used are to measures the ability of companies to generate pro its based on the level of corporate investment.

Return on Investment (ROI)
Return on Investment (ROI) can be de ined as a calculation that allows an attempt to determine the amount of business received from the investment of a certain amount of capital in the form of money or resources. The equation commonly used to calculate return on investment is as follows: Return on Investment (ROI) =

Research Framework and Hypotheses Development
In this research, the factors that affect the pro itability of the company, namely independent variable. In this research will be known whether the independent variable has a signi icant effect on the pro itability of the company. The independent variables in this research are receivable turnover and working capital turnover. So, in this research will test whether the turnover of receivables and working capital turnover will signi icantly affect the pro itability of the company. In the framework above shows that the path diagram there are two exogenous variables is turnover receivables and working capital turnover and one endogenous variable that is Return on Investment. In the diagram above suggests that the relationship between receivables turnover, working capital turnover and Return on Investment is a casual relationship.

RESEARCH METHOD
The data to be analyzed in this research relates to the relationship between the variables. Data analysis is done quantitatively with continued selection of statistical tests (ie multiple linear regression, T-test, and F-test), the goal is to determine whether the independent variable has a relationship with the dependent variable, determining the level of signi icant and ending with the basic research of drawing conclusions through acceptance or rejection of hypothesis.
Multiple linear analysis is used for states how big the rise and fall of the value of the variable depends on two or more independent variables. In addition, F test is also used to test the simultaneous hypothesis between the independent variables to the dependent variable on the multiple regression models. To test signi icant coef icient of multiple regression used F test with signi icant level <0.05.
Furthermore, T-test is used to test the regression coef icient by the partial in luence of independent variable to dependent variable. This T-test is used to ind out which independent variables are the most dominant its effect on the dependent variable. In multiple regression tested with a signi icant level <0.05.

RESULT AND DISCUSSION Multiple Regression Analysis
Multiple linear regression analysis is used to ind out how the relationship between the two subvariables. In this case, variable receivables turnover with return on investment company. The followingthe results as follows: Working Capital Turnover (X2) Figure 1. Research Framework will decrease by 0.020. Turnover of working capital (X2) increased by 1% while other variables (receivable turnover) are considered constant then return on investment will also decrease by 0.248.

T-test
T-test is used to know whether or not a partially independent variable in luence over a dependent variable. To test the hypothesis then irst sought Tcount value, then compared with Ttable value. The hypothesis is as follows:

F-test
This test is intended to test the overall regression coef icient and to know the meaning of the independent variable relation together with the dependent variable. Hypothesis testing will use a signi icant level of 5% = 0.05.
The results of Table 3. shows the Fcount of 5.603, this value which will be the best test statistic to be compared with the Ftable value calculated by df1 (degrees free of the numerator) = k -1= 3 -1 = 2 and df2 (degrees of denominator) = n -k = 5 -3 = 2 then obtained the Fcount<Ftable or 5.603<9.55 which means Ho accepted and Ha rejected, in other words, that simultaneously turnover receivables and working capital turnover no signi icant effect return on investment.  To add bene its to this research, it can be concluded suggestions for the next researcher should in doing research using analysis of other pro itability ratios, so it can be known which variable is more in luential as an effort to improve pro itability. In addition, the expansion of the sample and add to the research period by using longer time series data and using the latest data so that the results will be more accurate.