Analysis of The Effects of Trade Receivable Policies, Funding Policies and Investment Policies on Company Profitability

Case Study on PT. Astra International, Tbk, PT. Astra Otoparts, Tbk, And PT. Gajah Tunggal, Tbk

Abstract

Abstract. The goal of any company is to maximize profitability. Profitability is use to
measure how far the effectiveness of overall management in creating a profit for the
company. To achieve that objective then needed a policy that made of company by
effectively and efficiently. Policy which needed in company that serve the sale on credit is
the policy of account receivable. Receivable management is very important for any
company's daily operation. With presence of appropriate receivable management then the
company can minimize the uncollectible account receivable. Funding policy is very
decisive the company's capability in doing that operate activity and effect toward risk of the
company itself. Furthermore investment decision is often reputed as the most important
decision making of corporate financial manager to achieve the company's aim one of which
is to maximize the profitability of company. So expect the composition of these policies
can maximize the company's profitability.
This research is purpose to knowing the effect of account receivable policy, funding policy
and investment policy towards profitability of company in automotive sector listed on
Bursa Efek Indonesia year period 2005-2014. The sample of research consist of 3
automotive companies listed in Bursa Efek Indonesia and selected by purposive sampling.
The research data is secondary data obtained from Indonesian Capital Market Electronic
Library (ICAMEL) 2005 to 2014. The data analysis technique that used is path analysis to
discern the effect of account receivable policy, funding policy and investment policy
toward company's profitability.
The result of this research prove partially that account receivable policy has no significant
effect on profitability, funding policy negative and significant effect on profitability,
investment policy positive and significant effect on profitability of the company. Whereas
simultaneously account receivable policy and funding policy have significant effect on the
profitability of company, account receivable policy and investment policy have no
significant effect on profitability of company, funding policy and investment policy have
significant effect on profitability of company, and account receivable policy, funding
policy and investment policy have significant on the profitability of company.

Keywords : Account Receivable Policy, Funding Policy, Investment Policy, Company
Profitability