Influence of Working Capital Management and Policy to Profitability of Retail Trading Sector in Indonesia

Working Capital (WC) is an important aspect of any firms because its correlation to risk (liquidity) and return (profitability). This research examines the influence WC Management Policy (WCMP) profitability 21 listed retail trading sector in Indonesia from 2011-2020 using panel data regression. In this research, (WCM) measured by Cash Conversion Cycle (CCC) components which are Days Sales Outstanding (DSO), Inventory Outstanding, Payable (DPO); current assets divided total or referred as Investment (WCIP) liabilities Financing (WCFP); Earnings Before Interest, Tax, Depreciation, Amortization Margin (EBITDAM). The results show that can increase EBITDAM shortening CCC, primarily through DIO lengthening DPO. Further, may improve adopting a conservative instead aggressive one, means having higher lower with respect assets.