JRSSEM 2021, Vol. 01, No. 2, 101 – 115

E-ISSN: 2807-6311, P-ISSN: 2807-6494

DOI : 10.36418/jrssem.v1i2.15 https://jrssem.publikasiindonesia.id/index.php/jrssem/index

EFFECT OF RECEIVABLES, INVENTORIES, AND PAYABLES

ON WORKING CAPITAL

Dian Oktavia

Menik Indrati

1,2

Faculty of Business Economics, Esa Unggul University, Indonesia

e-mail: dianokta.akm14@gmail.com

,menik.indrati@esaunggul.ac.id

*Correspondence: dianokta.akm14@gmail.com

Submitted: 22 September 2021, Revised: 25 September 2021, Accepted: 27 September 2021

Abstract. The study aims to analyze the effect of receivables, inventories, and payables on working

capital. Receivables are measured by dividing total credit sales by the company's average

receivables, stocks are calculated by dividing the total cost of goods sold by the average inventory,

and payables are measured by dividing the total purchases by the average trade payables. Firm

size is measured by the logarithm of the company's total assets in year t, leverage is calculated by

dividing total debt by total equity. The percentage of net profit measures profitability (ROA) after

tax to total assets. The sample in this study was 30 companies with 90 data. The object of research

is a manufacturing company listed on the Indonesia Stock Exchange in 2018 – 2019. The statistical

methods used in this study are descriptive statistical analysis and inferential analysis, which include

classical assumption testing, multiple regression analysis, and hypothesis testing using the SPSS

program. The results of this study indicate that the receivables variable partially hurts working

capital. Inventories partly have a positive effect on working capital. Debt somewhat does not affect

working capital. The conclusion from the results of this study indicates that receivables, inventories,

and payables affect working capital. The test results show that receivables have no partial effect on

working capital. In contrast, the stock positively impacts working capital, and debt does not partially

affect working capital.

Keywords: receivables; Inventory; accounts payable; working capital.

Dian Oktavia, Menik Indrati                                                                                                 | 102 
 
DOI : 10.36418/jrssem.v1i2.15        https://jrssem.publikasiindonesia.id/index.php/jrssem/index 
 
INTRODUCTION 
 
The  global  economy  is  in  a  severe 
downturn in  2020,  and  the IMF  estimates 
that the permanent loss of output is around 
5%  during  the  covid-19  pandemic.  The 
latest report data for June 2020 showed a 
decline  in  world  economic  output  worth 
US$  12  trillion  (McKibbin  &  Vines,  2020). 
Since  2020, precisely in March, Indonesia 
has  been  shocked  by  one  of  the 
phenomena  COVID-19  pandemic,  which 
has hurt all parties (Nasution et al., 2020). 
Trusted  research  institutes  in  the  world 
have predicted the negative impacts of the 
global  economy  due  to  the  Covid-19 
pandemic, which will worry the world. Then 
the world economy is expected to reach -
2.2% by EIU, -1.9% predicted by Fitch EIU, 
indicates  -2.2%  by  Fitch  (Iskandar  et  al., 
2020). These economic predictions are very 
worrying  people  globally,  especially  for 
every  company  that  is  still  surviving.  It  is 
essential for every company today to create 
new  policies  that  can  bring  considerable 
profits  because  currently,  it  is  a 
complicated  situation  for  a  company  to 
exist.  The  company's  focus  lies  in 
management, which must continue to work 
to  stabilize  cash  flow  while  increasing 
volume.  Sales  so  that  the  company  can 
survive  the  Covid-19  pandemic 
(Hadiwardoyo, 2020). 
Generally,  current  assets  and  current 
liabilities are part of working capital which 
is quantitative due to the total funds used 
for  short-term  operating  purposes  at  the 
company.  (Weston.  J.Fred  dan  Thomas 
E.Copeland,  1997)  Provide  an 
understanding of working capital as current 
assets  minus  current  liabilities.  Working 
capital  is  company  investment  in  cash, 
securities,  receivables,  and  inventories 
minus  current  liabilities  used  to  finance 
existing  assets.  The  operating  capital 
mechanism generally refers to all parts of 
existing  assets  and  current  liabilities. 
(Ajibolade  &  Sankay,  2013)  states  that 
working capital management is essential in 
discussing liquidity and profitability issues 
that  involve  decisions  about  the  amount 
and composition of current assets and their 
funding.  Achieve  profit  can  only  achieve 
profit  or  profit  if  it  is  supported  by 
adequate capital.  
The  mechanism  for  measuring 
receivables is receivable turnover. (Utami & 
Dewi,  2015)  states  that  a  high  level  of 
receivables  turnover  can  indicate  low 
working capital invested in the receivable. 
If  it  is  low,  the  receivable  has  an  excess 
investment.  Low  accounts  receivable  are 
usually  caused  by  an  inefficient  credit  or 
collection department or a policy change. 
According to (Haryanto, 2019), receivables 
come  from  company  assets  arising  from 
credit  sales  transactions  for  goods  and 
services  produced  by  the  company  and 
must be repaid within one year. Receivable 
turnover can calculate estimated receivable 
collection  time  in  accounts  receivable 
turnover.  In  addition,  current  assets 
receivables in the working capital element 
and the role of inventory which is part of 
current assets, 
 also  important  to  determine  the 
effectiveness  of  inventory  management, 
which can be seen from the calculation of 
the inventory turnover rate. The higher the 
inventory turnover rate, the lower the time-
bound capital is in inventory. (Syamsuddin, 
2002)  states  that  a  relatively  smaller 

103 | Effect of Receivables, Inventories, and Payables on Working Capital

amount of working capital is needed to

meet the sales volume referred to in

increasing inventory turnover.

Part of the working capital there is

current debt. Debt owed by the company

generally occurs due to the company not

meeting its operational needs with its

capital. The company borrows funds from

other parties or delays payments that

become obligations. (KIPKEMOI, 2018)

reveals that a well-known measure of

Working Capital Management is the cash

conversion cycle referred to here, the time

lag between purchasing raw materials and

collecting sales of finished goods. The

longer this time lag, the greater the

working capital investment. (Agbada &

Osuji, 2013) explains that efficient liquidity

management involves planning and

controlling current assets and current

liabilities, thereby eliminating the risk of

inability to meet short-term obligations

that are due and avoiding excessive

investment in these assets. Firm size,

leverage, and profitability can affect

working capital in manufacturing

companies. Therefore, these three factors

will be used as control variables in this

study.

Signaling Theory

Theory shows a difference in

information where one party has more

information to seek personal gain than

other parties or commonly referred to as

information asymmetry of related parties.

that information. (Kunz et al., 2017) have

also shown that signal considerations may

influence financial decisions and accurate

investment decisions when managers are

interested in the current price level.

Outsiders can also interpret increased debt

as the company's ability to pay off the debt

in the future or low business risk so that

additional debt will send a positive signal

(Brigham, Eugene F dan Houston, 2001).

Outsiders are because companies that

experience increased debt can be said to be

companies that believe in the company's

prospects.

Critical Resource Theory

based on the required resource theory

proposed by (Hirdinis, 2019) which

suggests that the larger the company's

scale, the profitability will also increase, but

at a certain amount, the size of the

company will decrease the company's

profit. The theory of critical resources is also

used to explain the effect of leverage and

liquidity on company profitability.

Therefore, the idea of essential resources

indicates that the larger a company is, the

higher the profitability and vice versa. As

for the leverage variable regarding the

control by the company owner on the

company's debt, profitability is influenced

by the cost of debt obligations. (Sharma,

Naresh Kumar, et al., 2010) also revealed

that there is a relationship between

company size and the ability of company

owners to control intangible factors that

can encourage companies to be more

profitable. This indicates that the larger the

scale of the company, the profitability will

also increase. On the other hand, the critical

resource theory is related to liquidity.

Namely, if the number of current assets can

exceed the existing high debt, the company

can fulfill its debt obligations to increase

profitability.

Dian Oktavia, Menik Indrati                                                                                                 | 104 
 
Account Receivable 
A  receivable is  selling's  form  product 
that has been made between two parties, 
but  in  the  sale  transaction,  the  payment 
system is not made in cash but is done on 
credit. But on the other hand, credit sales 
will  provide  market  expansion 
opportunities  that  can  increase  operating 
profits, although not without risk (Fahlevi & 
Yani,  2021).  (Kasmir, 2011)  the  higher  the 
ratio  shows  that  the  working  capital 
invested  in  receivables  is  lower,  proving 
that capital  can be  used efficiently,  which 
means  good  conditions for  the  company. 
On the other hand, the lower the ratio, the 
higher  the  investment  in  receivables. 
However, the opinion of (Fahmi dan Irham, 
2012) explains where receivables are a form 
of  sales  made  by  a  company  where 
payments  are  not  made  in  cash  but 
gradually. 
 
Inventory 
Definition  of  Inventory  according  to 
(Supriati et al., 2017), as a form of asset that 
inventory must manage adequately, errors 
in  management  will  result  in  other  asset 
components being not optimal, it can even 
result  in  losses.  Leadership  by  managing 
inventory turnover can be very decisive in 
controlling  the  continuation  of  the 
company's  activities.  The  inventory 
turnover  rate shows  the  number  of  times 
the inventory is replaced in being bought 
and resold. This Inventory Turnover Ratio is 
used  to  determine  the  process  in  which 
inventory turnover  from the  beginning to 
return to cash is (Munawir, 2010). the ratio 
obtained  is  high  and  can  prove  that  the 
company is working efficiently and liquid, 
which  causes  better  inventory.  the 
inventory  turnover  ratio  decreases,  the 
company  is  working  inefficiently  or 
unproductively,  resulting  in  a  lot  of 
inventory  piling  up.  This  will  lead  to 
investments  with  low  rates  of  return  and 
result  in  financial  statements  (Kasmir, 
2014). 
 
Account Payable 
Based on research by (Alpi, 2020), debt 
is  obtained  from  capital  originating  from 
outside  the  company  that  is  temporarily 
working  in  the  company  concerned.  This 
capital is a loan that capital must repay in 
time. To measure how far the company uses 
funding through debt, it can be measured 
using  the  debt ratio  (debt  to  asset  ratio), 
which compares total debt and total assets. 
The  debt  ratio  means  how  much  debt  is 
used  to  finance  the  company's  assets 
(Keown, A.J., Scott, D.F., Martin, J.D., Petty, 
2011). If the debt ratio is high, it means that 
funding through debt is also increasing. As 
a  result,  it  is  increasingly  difficult  for  the 
company  to obtain  additional funds  from 
loans because it is feared that they will not 
pay them. Creditors are more interested in 
a low debt ratio because the lower it is, the 
greater  the  protection  against  creditor 
losses.  When  viewed  from  the  side  of 
shareholders,  they  are  more  concerned 
with high leverage because it will increase 
profits (Kasmir, 2014). 
 
 
Working Capital 
According to  the  Indonesian  Institute 
of Accountants (Ikatan Akuntan Indonesia, 
2007),  working  capital  is  based  on  the 
company's production capacity in units of 
production per day. Meanwhile, according 

105 | Effect of Receivables, Inventories, and Payables on Working Capital 
 
to (Krapf et al., 2016), all short-term assets 
or current assets consist of cash, securities 
whose activities are traded by the company, 
inventories,  and  accounts  receivable. 
Working capital factors affect high and low 
profitability.  Every  company  in  its 
operations requires capital because capital 
is  very  influential  on  the  company  to 
achieve its goals so  that high profitability 
supports the company's operations to the 
fullest  (Bramasto,  2007).  The  purpose  of 
working capital management is to manage 
each  item  of  current  assets  and  current 
liabilities  as  well  as  possible  so  that  the 
amount  of  networking  capital  with  the 
calculation  of  existing  assets  minus  the 
desired  current  debt  can  be  maintained. 
Good or bad working capital management 
will have a direct effect on the company's 
financial  position.  The  level  of  working 
capital will affect investors when they invest 
their  capital  in  a  company.  State-owned 
companies that have gone public need to 
pay  attention  to  working  capital 
management to attract investors to invest 
in  companies  (Margaretha  &  Ginting, 
2016). 
 
Size  
Several factors are determined by the 
company's size with the company owner's 
control  over  technology,  intellectual 
property, and assets described by (Rediana, 
2017). Several parameters that can be used 
to  determine  the  size  of  the  company's 
scale are the number of employees used by 
the company to  run company operations, 
the value of sales or income generated by 
the company,  and the  total assets owned 
by  the  company.  company  to  carry  out 
company operations, the value of sales or 
income generated by the company, and the 
total  assets  owned  by  the  company. 
(Becker-Blease et al., 2010) in his research 
using  three  economic  measuring  theories 
developed  by  (Kumar  &  Kaur,  2016)  by 
showing the relationship between firm size 
and  profitability.  By  using  the  company's 
size as a proxy for input and profitability as 
a measure of output. Company size can be 
assessed  in  several  ways.  The  size  of  the 
company can be based on asset value, total 
sales,  market  capitalization,  number  of 
workers, etc. The greater the importance of 
these  items,  the  greater  the  size  of  the 
company. (Indrati et al., 2018) 
 
Leverage 
Leverage  is  a  ratio  that  projects  the 
state  of  debt  in  the  company's  finances. 
Companies with  excessive leverage are  at 
risk of not meeting their debt obligations 
on time (Carpenter et al., 1994). Meanwhile, 
according  to  (Boissay  et  al.,  2020)  shows 
that  companies  with  high  levels  of  debt 
tend to choose to sell their receivables as a 
source  of  funding  when  they  have  high-
quality  credit,  rather  than  using  debt  for 
future projects. This leverage ratio serves to 
measure  to  what  extent  the  company's 
assets  are  financed  by  debt  (Firman  & 
Nasution,  2019).  This  leverage  ratio 
compares  the  company's  overall  debt 
burden  to  its  equity.  In  other  words,  this 
ratio  shows  how  much  of  the  company's 
assets  are  owned  by  shareholders 
compared to assets owned by creditors or 
creditors.  If  the  shareholders  have  more 
assets, then the company is said to be less 
leveraged.  However,  if  the  creditor  or 
lender has the majority of assets, then the 
company in question is said to have a high 

Dian Oktavia, Menik Indrati | 106

level of leverage. Following the critical

resource theory which proves that the

higher this ratio, the higher the costs that

must be borne by the company, which

means the higher the obligations of the

company, so this affects several things,

namely the company's profitability

decreases and can result in the company's

ability to obtain profits. Profit is decreasing.

On Assets Ratio

Profitability is the ability of a company

to generate profits which are also used for

business continuity. The profitability

calculation is intended to find out how far

the company's management can control

the business efficiently. The company's

profitability is also influenced by the

efficiency of working capital management

and other factors such as the type, scale,

age of the company, capital structure, and

products produced, so the higher the

profitability, the better the state of a

company (Mielcarz et al., 2018). ROA can be

interpreted as the result of a series of

company policies or company strategies to

obtain a good profit and also the impact of

the influence of environmental factors. This

analysis focuses on the profitability of

assets and thus ignores ways to finance

these assets (M.Hanafi, Mamduh, 2007).

This ratio also shows the productivity of all

company funds, both loan capital and own

capital. The slighter (lower) this ratio is, the

worse it is, and vice versa. The smaller

means that this ratio is used to measure the

effectiveness of the company's overall

operations. This means that the increased

profit generated and the excellent

condition of the company will attract the

attention of investors to invest (Larasati,

2011). This study using a measuring

instrument ROA (Return On Assets). This

ratio is used as economic profitability,

which measures the company's ability to

generate profits by using the total assets or

wealth owned by the company after

adjusting for the costs intended to fund

these assets (Sekti, 2017).

The research model does not discuss

the effect of macroeconomic uncertainty

risk on working capital. The research of

(Dbouk et al., 2020) researched US

manufacturing companies in the period

1990-2018 by showing that economic

uncertainty was positively related to

influencing the level of receivables,

inventories, and debt on working capital.

Therefore, the number of research objects

and the year of analysis used distinguishes

it from previous research. Researchers used

index research objects on the Indonesia

Stock Exchange manufacturing companies

in the period 20-2019. Based on the

explanation above, the purpose of this

study is to examine receivables, inventories,

and payables in manufacturing companies

listed on the Indonesia Stock Exchange in

20 – 2019 on working capital. So that doing

this test will provide benefits for the parties

concerned.

METHODS

The research model will explain the

relationship between the variables to be

studied and aims to facilitate

understanding the research direction.

Based on the above review, the research

model is shown in Figure 1, as follows:

107 | Effect of Receivables, Inventories, and Payables on Working Capital

Figure 1. Research Model

There is one dependent variable

working capital in this study, and three

independent variables receivables,

inventories, and payables. Receivables are

measured using the receivables turnover

ratio by comparing credit sales to average

receivables (Kasmir, 2014) Inventories are

measured by the inventory turnover ratio

by comparing the cost of goods sold to the

average Inventory of (Kasmir, 2014). The

debt ratio measures the size of the debt by

comparing the total debt to the total assets

(Hermanto B, 2015). Firm size, leverage, and

profitability/ROA are used as control

variables in this study. Firm size is measured

using the logarithm of total assets in (Ines,

2017) while the leverage ratio is measured

by dividing total debt by total equity (Ines,

2017) and profitability/ROA is measured by

dividing net income by total assets

multiplied by one hundred percent

(Darmadji, Tjiptono dan Fakhruddin, 2012).

The research design used is a quantitative

approach using secondary data. The

sampling technique is carried out by

purposive sampling to obtain a

representative sample adjusted to certain

criteria, namely manufacturing companies

that are consistently listed on the IDX in 20-

2019 consecutively and companies

attaching annual reports. 30 Manufacturing

Companies meet the criteria listed on the

Indonesia Stock Exchange and then

obtained observations that determine the

number of samples in this study as many as

90 sample data.

The data analysis technique used SPSS

vr.25. In this study, the data analysis

technique used is multiple linear regression

to prove a significant effect of the

independent variable on the dependent

variable. The following are numerous linear

analysis models, which can be stated as

follows.

Y i, t = β0 + β1AR + β2INV + β3AP + β4SIZE

+ β5LEV + β6ROA + Ɛ

Description:

Y i, t = Working capital at all time

periods t

β0 = Constant

β1,2,3,4,5,6 = Regression coefficient of

each proxy

1AR = Accounts Receivable

2INV = Inventory

3AP = Debt

SIZE = Company Size

LEV = Leverage

ROA = On Assets

Ratio = Error

RESULTS AND DISCUSSION

RESULTS

Descriptive statistical analysis provides

an overview of the data consisting of

minimum, maximum, average values, the

mean, and standard deviation. The

Dian Oktavia, Menik Indrati | 108

descriptive statistical analysis test shows

that N or the amount of data for each valid

variable is 90, from 90 sample data on

financial performance (Y), the minimum

value is 0, the maximum value is 30.41, from

the period 2017 - 2019, the mean value is

23.42, and the value is 23.42. the standard

deviation of 5.31.

A normality test is used to determine

whether the data is taken from a normally

distributed population or not. Testing for

normality using the Kolmogorov Smirnov

test shows that the data used in this study

is generally distributed because asymp sig

0.200, the figure is greater than the

significance level of 0.05 the data can be

used in testing with the regression model.

The multicollinearity test was used to

test whether the regression model found a

correlation between the independent

variables. The multicollinearity test in this

study uses the tolerance value and variance

inflation factor (VIF). The results of

multicollinearity show that the tolerance

value for all variables is greater than 0.1 and

the inflating factor value for all variables is

less than 10, so this study does not occur

multicollinearity symptoms.

The heteroscedasticity test aims to test

whether there is an inequality of variance

from the residual observations to other

observations in the regression model. The

heteroscedasticity test in this study shows

that the distribution of the dots pattern is

far apart and randomly spreads so that it

does not form a pattern. Therefore, from

the results of this study, it can be stated

that there is no heteroscedasticity problem

in the regression model.

The autocorrelation test aims to test

whether in the linear regression model

there is a correlation between the

confounding error in period t and the

confounding error in period t-1 (previous).

Autocorrelation arises because the residual

(interference error) is not independent of

one observation to another. One way to

find out whether there is autocorrelation or

not is to use a Run Test. The autocorrelation

test in this study shows that the probability

(sig) in each regression model used is more

significant than 0.05 or 5%. It can be stated

that there is no autocorrelation symptom.

From the calculation of multiple linear

regression, it can be seen that the

relationship between the independent and

dependent variables can be formulated as

follows:

Y i, t = 0.839 – 0.184AR + 0.321Inv +

0.054AP + 0.004SIZE + 0.297LEV +

0.294ROA +

Where is the constant value in this

study is 0.839 which states that if no

independent variable is considered

constant (x1=0, x2=0, x3=0, x4=0, x5=0,

x6=0), then working capital is 0.839. The

coefficient of receivables is reduced by -

0.184, meaning that if there is an increase

in receivables of 1%, it will reduce working

capital by 0.184 or 18.4%. The inventory

coefficient increases by 0.321, meaning that

if there is a 1% change in profitability, it will

increase working capital by 32.1%. The debt

coefficient increases by 0.054, meaning that

if there is a 1% change in profitability, it will

increase working capital by 5.4%. The

coefficient of size is 0.004, and leverage is

0.297, Roa is 0.294.

The coefficient of determination test

aims to measure how far the model's ability

to describe the variation of the

109 | Effect of Receivables, Inventories, and Payables on Working Capital

independent variables is. The coefficient

test of receivables, inventories, and

payables can explain the working capital of

13.8% and 86.2% by other factors not

examined in this study.

The f test determines whether the

independent variables (X1 and X2)

significantly affect the dependent variable

(Y). The f test shows that the variable x

simultaneously affects the variable y.

The t-test aims to determine whether

the partially formed regression model

equations the independent variables (X1

and X2) significantly affect the dependent

variable (Y). The t-test shows that accounts

receivable partly has no significant effect

on working capital. The inventory variable

partially has a significant positive impact on

working capital. The debt variable

somewhat does not affect working capital.

Table 1. Hypothesis results

Hypothesi

Significanc

e value

descriptio

accounts

receivable

has a

negative

and

insignifican

t effect on

working

capital

0.092

Rejected

Inventory

has a

negative

and

insignifican

t effect on

working

capital

0.005

Accepted

Debt has a

negative

and

insignifican

0.495

Rejected

t effect on

working

capital.

Source: SPSS Data program

Relationship Between Variables

Relationship of Receivables to Working

Capital

According to (Prakoso, 2014), the

company's receivable management is

required to manage its receivables properly

and correctly following applicable

company policies by using the correct

calculations so that the goals set by the

company are for short-term and long-term

purposes. can be achieved optimally and

adequately. (Ammy & Alpi, 2018) Suppose

the amount of investment embedded in

receivables is too high. In that case, it will

cause low working capital turnover so that

the company's ability to increase sales

volume will be more minor. The reduced

sales volume has an impact on the reduced

profit to be obtained by the company.

(Arianti, 2018) who prove that receivables

do not affect profitability and working

capital. This shows that the level of

receivables does not involve working

capital management. Based on the

description above, the following hypothesis

is proposed:

H1 = Receivables hurt working capital.

Inventory Relationships with Working

Capital

According to (Munawir, 2010) the

mechanism for the inventory turnover

period is the time it takes for companies to

hold inventory in warehouses, where the

slower the company owns the inventory of

Dian Oktavia, Menik Indrati                                                                                                 | 110 
 
goods,  it  will  reduce  the  cash  generated 
from  the  sale  of  these  inventories,  where 
this will have an impact on reducing funds 
for  working  capital,  and  reducing  the 
company's operational activities. According 
to (Dewi et al., 2016) (Murni & Uhing, 2018), 
inventory turnover has a significant positive 
effect on profitability and working capital. 
This shows that high inventory turnover can 
increase  profitability.  Based  on  the 
description above, the following hypothesis 
is proposed: 
H2  =  inventory  has  a  positive  effect  on 
working capital.  
 
Debt Relationship to Working Capital 
According  to  (Warren,  Carl  S.  Reeve, 
James M. dan Fess, 2008), the explanation 
is that debt is capital that comes from bank 
loans,  financial  institutions,  or  by  issuing 
debt securities or bonds. For this use, the 
company  provides  compensation  in 
interest, which becomes a fixed burden for 
the  company.  However,  (Lukman,  2011) 
states that  debt  is a  bill  that comes  from 
creditors to companies that debt must pay 
with  money  or  services  at  a  time  that  is 
following  the  initial  agreement  made  by 
both  parties.  (Sinaga  et  al.,  2019)  a 
company that chooses debt as a source of 
funding  is  a  company  that  has  a 
responsibility to do more work so that the 
equity used can create more profits so that 
the  company  can  fulfill  its  obligations. 
However,  if  the  company  cannot  manage 
its debt correctly and adequately, this can 
cause its debt to increase and reduce the 
company's  profits.  (Ferawati  et  al.,  2020) 
prove  that  debt  does  not  affect  the 
profitability  of  working  capital.  Based  on 
the  description  above,  the  following 
hypothesis is proposed: 
H3: Debt hurts working capital. 
 
DISCUSSION  
This  study  is  under  hypothesis  1, 
where  receivables  harm  working  capital, 
and the results are rejected. The results of 
this study are the same or consistent with 
research  conducted  by  (Arianti,  2018) 
which has proven that receivables have no 
significant  effect  on  working  capital 
profitability.  This is  because  the  high  and 
low  receivables  ratio  does  not  affect 
working capital management, so to analyze 
working  capital  management,  the 
receivables  instrument  is  not  one  of  the 
guidelines.  investors  do  not  use  the 
receivables  instrument  guidelines  as  a 
financial  instrument  to  analyze  working 
capital management.  
Based on hypothesis 2, inventory has 
a  positive  effect  on  working  capital;  the 
results are accepted because the partial test 
results  show  that  stock  has  a  significant 
positive  impact  on  working  capital.  The 
results  of  this  study,  inventory  has  a 
positive  effect  on  working  capital.  The 
results  of  this  study  are  in  line  and 
consistent  with  the  results  of  research 
conducted by (Diana & Santoso, 2016) and 
(Murni & Uhing, 2018) which have proven 
that  inventory  has  a  significant  positive 
effect on working capital profitability. This 
shows  that  the  manufacturing  companies 
can manage their inventory efficiently, thus 
resulting in an excellent inventory turnover 
from  year  to  year,  to  increase  its 
profitability.  
Based  on  hypothesis  3,  debt  hurts 
working  capital,  the  results  are  rejected 
because  the  partial test  results  show  that 

111 | Effect of Receivables, Inventories, and Payables on Working Capital

debt hurts working capital. The results of

this study are the same or consistent with

the results of research conducted by

(Ferawati et al., 2020), which has proven

that debt does not affect working capital

management. The reason for this is

because the high and low debt ratio does

not involve working capital management.

So that investors do not make the debt

instrument guidelines a financial guide for

analyzing working capital management.

CONCLUSIONS

Based on the results of data analysis

and discussion, it can conclude that the

receivables policy hurts working capital,

which means that the high and low ratio of

receivables does not affect working capital

management. Inventory has a positive and

significant effect on working capital. It

means that there is a positive effect

indicating that the higher the inventory

turnover rate, the higher its profitability.

This is because the inventory owned by the

company must be by the company's needs

so that interest costs are reduced, minimize

storage and maintenance costs in the

warehouse. The company does not

experience losses, so all of this will increase

sales volume, and the profits earned by the

company will be even greater. Debt does

not affect working capital; these results

mean that the high and low debt ratio does

not involve working capital management.

The research conducted has limitations

because the business sector is too broad in

manufacturing companies. The receivables

and debt variables seen from the statistical

table have not affected working capital.

Future research is expected to be able to

conduct research with different types of

businesses or the same type of business

and compare each business sector in the

manufacturing company and add cash

turnover and sales variables. This is due to

increased knowledge by showing the

influence of these variables. on working

capital management. The managerial

implication in this study is that it is

expected that the company's management

needs to pay attention to working capital

management in running the company

because good working capital

management can generate greater profits

for the company. Therefore, company

management needs to manage the

efficient use of funds, accounts receivable,

and inventory. Meanwhile, investors and

potential investors should be more careful

in making investment decisions in

companies that are carried out by assessing

profitability in the observation period in the

presentation of financial statements.

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