THE EFFECT OF CASH RATIO AND RECEIVABLE TURNOVER ON NET PROFIT MARGIN
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Date
2020
Journal Title
Journal ISSN
Volume Title
Publisher
International Journal of Psychosocial Rehabilitation, Vol. 24, Issue 2
Abstract
This research aims to make sure the effect of cash ratio & receivable turnover on net profit margins.
This research is motivated by an increase in the efficiency and effectiveness of the corporate in running the company.
To measure the efficiency of corporate activities, one of them is the ability to obtain profits that are measured using
profitability ratios. Net profit margin is used to calculate the capacity of a corporate with all reserves put money into
in assets used for the corporate's operations to gain revenue. Cash ratio’s calculates a corporate's capacity to pay
short-term debt. Receivable turnover provides an understanding of the company's quality and the company's success
in collecting these receivables. The population of this research’re corporates in the sector of industry of consumer
goods listed on the ISX for the period of 2016-2018, namely 52 companies. The sampling technique uses purposive
sampling so that there are 35 companies that meet the criteria. The outcomes of the research stated about partially
the cash ratio affected the net profit margin, receivable turnover affected the net profit margin, and simultaneously
the cash ratio and receivable turnover affected the net profit margin.
Description
Keywords
cash ratio, receivable turnover, net profit margin