The Influence of Working Capital on Profitability in the Hospitality Sector in Indonesia Registered in Indonesia Stock Exchange 2017-2019

Abstract

The main objective of the company is to maximize profits (profit). Working capital is a major part of the resource which has an impact on profit. The purpose of this study is to determine the effect of working capital on the profitability of hotel companies listed on the Indonesia Stock Exchange. The population used in this study is the population of hospitality companies that publish complete financial reports after being audited starting from 2017 to 2019, totaling 10 companies listed on the Indonesia Stock Exchange. The results of this study are: 1) The results of simple regression and testing of the coefficient of determination and statistical T test prove that the Debt to Equity Ratio (DER) has a negative effect on Return On Asset (ROA). 2) The results of this study indicate that Total Assets Turnover has no effect on Return On Assets in the hotel sector for the period 2017-2019.3) The results show that the current ratio has no positive effect on Return On Assets, 4) Working capital as measured by the Debt Equity Ratio has a negative effect on the profitability of the hotel sector companies.