Volume 6, Issue 7, July – 2021 International Journal of Innovative Science and Research Technology

ISSN No:-2456-2165

The Influence of Asset Structure, Inventory Turnover

and Accounts Receivable on Profitability of
Pharmaceutical Companies in Indonesia
Emilda1, Aris Setio Wibowo2, Sri Wahyuningsih3
1,2,3
Faculty Economic of Indo Global Mandiri University
Palembang City, Indonesia

Abstract:- One of the sub-sectors in manufacturing company that are used in the long term of more than 1
companies, namely the pharmaceutical subsector have year. Broadly speaking, fixed assets are divided into two
current assets that are greater than fixed assets. Based on types, namely tangible fixed assets such as land, buildings,
data from balance sheet of companies, it is known that machinery, and other vehicles. Intangible fixed assets for
there are 8 out of 10 companies that have more current example patents, trademarks, goodwill, licenses, and
assets compared to fixed assets. The purpose of this study others [3]
is to determine the effect of asset structure and working
capital management on company profitability. The data In general, manufacturing companies have larger
analysis method in this research is the dependent method. current assets when compared to fixed assets in the
The variables in this study are asset structure, inventory company's asset structure. One of the sub-sectors in
turnover, accounts receivable turnover, and company manufacturing companies, namely the pharmaceutical sub-
profitability. The results of the study are based on the sector, when viewed from the pattern of asset structure,
results of the t statistical test (partial test) that only pharmaceutical companies have larger current assets when
variable inventory turnover has no effect on profitability, compared to fixed assets. Based on data from the financial
the rest of the other variables are asset structure and statements of companies that are members of the
receivables turnover have negative effect on profitability pharmaceutical sub-sector, it is known that there are 8 out of
as measured by the GPM ratio. Based on the F statistical 10 companies that have larger current assets when compared
test (simultaneous test), the asset structure, inventory to fixed assets.
turnover, and accounts receivable turnover together or
simultaneously have a significant effect on profitability. The greater the ratio of the asset structure, the better
because it shows the availability of cash, receivables and
Keywords:- Asset Structure, Working Capital Management, inventories that can be used at any time to finance the
Profitability. company's operational needs in generating
profits [4]. However, this large current asset must be followed
I. INTRODUCTION by good working capital management because working
capital performance will affect the company's operating
One of the roles of financial managers is to make performance. The performance of the company's working
decisions regarding company finances, including decisions on capital management can be seen from the company's ability to
the allocation of funds. The allocation of company’s funds is manage current assets which is indicated by, among others,
reflected in the balance sheet on the asset position. The asset the inventory ratio and the receivables turnover ratio.
position of the balance sheet also describes the company's
asset structure. Asset structure is the determination of how When viewed from the inventory and receivables
much funds are allocated for each asset component, both in turnover in the pharmaceutical sub-sector, there are
current assets and fixed assets [1]. Asset structure is a pharmaceutical companies in Indonesia that have inventory
comparison between current assets and fixed assets both in and receivables turnover below the industry standard ratio
absolute terms and in relative terms. Asset structure in and some have inventory and receivables turnover above the
absolute terms is a comparison in nominal terms, while asset industry standard ratio. The higher the inventory and
structure in a relative sense is a comparison in percentage receivables turnover, the better the company's ability to
form [2] manage inventory and receivables and vice versa. According
to A. Rahemen and M. Nasr [5] the management of working
Current assets are assets or assets that can be capital is one of the important components in the company's
immediately cashed (cashed out) when needed and for a finances because it directly affects the profitability of the
maximum of 1 year. The preparation of these current assets company.
usually starts with the most current assets which are the
easiest to liquidate. The components in current assets consist Several studies have been carried out to examine the
of cash, banks, securities, receivables, inventory, prepaid rent, effect of asset structure on profitability, such as H. Rahmi
and other current assets. While fixed assets are assets of the [6] , F. Rahmiyatun and K. Nainggolan [4], and I. Rahmawati

IJISRT21JUL152 www.ijisrt.com 37
Volume 6, Issue 7, July – 2021 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165
and M. K. Mahfudz [7]. The results of the study H. Rahmi Working Capital
[6] and K. Nainggolan [4] state that the asset structure affects Working capital is defined as the capital used to finance
the level of profitability, while I. Rahmawati and M. K. the daily operations of the company, especially those that
Mahfudz [7] stated the asset structure does not significantly have a short period of time. Working capital is also defined as
affect profitability. all current assets owned by a company or after current assets
are reduced by current liabilities. Or in other words, working
Studies that focus on the effect of inventory turnover on capital is an investment invested in current assets or short-
profitability, such as I. Lazaridis and D. Tryfonidis [8]), A. term assets, such as cash, banks, securities, receivables,
Raheman and M. Nasr [5], L.D. Wikardi and N.T. Wiyani inventory, and other current assets. While working capital
[9], and N. Sufiana and N. Purnawati [10]. Based on the management is a management of the company's investment in
results of research conducted by I. Lazaridis and D. short-term assets, meaning how to manage investment in the
Tryfonidis [8], A. Raheman and M. Nasr [5], N. Sufiana and company's current assets [3]
N. Purnawati [10], N.T. Wiyani [9], and M. A. Canizio [11]
show the level of inventory turnover has an effect on Still according to Kasmir [3] in general the concept of
profitability. Meanwhile, research conducted by N. M. V. working capital is divided into 3 (three) kinds, namely,
Sari and I. G. A. N. Budiasih [12] states otherwise that quantitative, qualitative, and functional concepts. Working
inventory turnover has no effect on company profitability. capital quantitative concept is the total amount of current
assets which is also called gross working capital. The concept
While studies that focus on the effect of receivable of quality is a concept that focuses on the quality of working
turnover on profitability, such as N. Sufiana and N. Purnawati capital called net working capital. Functional concept
[10], E. A. Rahayu and J. Susilowibowo [13], and M. A. Emphasizes the function of funds owned by the company in
Canizio[11]. Based on the results of research conducted by N. obtaining profits.
Sufiana and N. Purnawati [10] and M. A. Canizio [11] stated
that receivable turnover has an influence on company Profitability
profitability. However, this study is not in line with the results According to B. Riyanto [2] profitability is the
of research conducted by E. A. Rahayu and J. company's ability to earn profits through all existing
Susilowibowo [13] which shows that accounts receivable capabilities and sources. Profitability ratios are used to assess
turnover has no significant effect on profitability. the company's ability to generate profits. From the type of
profitability ratio, in this study only used the ratio of
Based on the results of the research above regarding the Gross Profit Margin. Gross Profit Margin (GPM) serves to
asset structure, inventory turnover, and receivables on measure the rate of return of gross profit on sales.
profitability which have different research results. Therefore,
this study aims to determine whether there is an influence of Relationship between Asset Structure and Working
asset structure, inventory turnover, and accounts receivable Capital Management with Profitability
turnover on the profitability of pharmaceutical companies in Companies that have high fixed assets can be used as
Indonesia that have more current assets than fixed assets in collateral to obtain funding [14]. Companies that have high
their asset structure. fixed assets will find it easier to increase profits because there
are assets that can be used as collateral to get funding [7].
II. LITERATUR REVIEW
In addition to the asset structure, working capital is very
Asset Structure important for the company because it will affect the
Asset structure is a comparison between current assets company's profitability. Given the importance of working
and fixed assets both in absolute terms and in relative terms capital, companies need to manage work well because if it is
[2], while according to L. Syamsuddin [1] asset structure is not managed properly, a shortage of working capital will
the determination of the allocation of each component of cause the company's operations to be disrupted and too much
assets, both in current assets and in fixed assets. working capital will cause idle funds [3] . Receivables and
inventories are components of working capital. The capital
According to Kasmir [3], current assets are assets or component needs to be managed to increase the company's
assets that can be immediately cashed in when needed and for growth or maximize profits [8] . The company's ability to
a maximum of 1 year. The preparation of these current assets manage inventory and receivables can be seen from the
usually starts with the most current assets which are the receivables turnover ratio and inventory turnover ratio. The
easiest to liquidate. The components in current assets consist higher the inventory and accounts receivable turnover
of Cash, Bank, Securities, Receivables, Stock, prepaid lease, rate, the better the company in managing inventory and
and other current assets. receivables, and otherwise.

While fixed assets are assets or assets of the company The higher the inventory turnover, the better the
that are used in the long term of more than 1 year. Broadly company in managing inventory and receivables, and
speaking, fixed assets are divided into two types, namely otherwise. According to Ramadita & Suzan [15] if the
tangible fixed assets and Intangible fixed assets. inventory turnover is high, the more profits the company will
get. Results Based on research conducted by Lazaridis and
Tryfonidis [8], Raheman and Nasr [5], Sufiana and Purwati

IJISRT21JUL152 www.ijisrt.com 38
Volume 6, Issue 7, July – 2021 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165
[10], Wikardi & Wiyani [9], and Canizio [11] show the level Definition and Measurement of Research Variables
of inventory turnover has an effect on profitability.
Asset Structure (X 1 )
Accounts receivable turnover is very important for Asset structure is the ratio of current assets to fixed
companies to be able to find out early on the occurrence of assets [2]. The formula for the asset structure is as follows
receivables. Because if there is a receivable activity, the more
receivables can be collected. With so many receivables that
can be collected, it will have an impact on increasing the Asset Structure = Current Assets x 100%
company's profitability [16]. The results of this study are in Fixed Assets
line with research conducted by Sufiana & Purnawati [10]
and Canizio [11] which state that receivables have an Inventory Turnover (X 2 )
influence on company profitability. Inventory turnover is a ratio used to measure the
number of times the funds invested in this inventory rotate in
III. RESEARCH METHOD one period [3] . Inventory turnover can be measured using the
following formula
Population and Sample
The population in this study are all pharmaceutical Inventory Turnover = Sales
companies listed on the Indonesia Stock Exchange. The Inventory
following table lists the companies that are members of the
pharmaceutical sub-sector in Indonesia.
Accounts Receivable Turnover (X 3 )
Table 1. List of Pharmaceutical Companies Accounts receivable turnover is a ratio used to measure
Company Name IPO Date how long it takes to collect receivables during a period or
PT Darya Varia Laboratio, Tbk Nov 1, 1994 how many times the funds invested in these receivables rotate
PT Indofarma, Tbk April 17, 2021 in one period [3]. Accounts receivable turnover rate can be
PT Kimia Farma, Tbk July 4, 2001 calculated by the following formula
PT Kalbe Farma, Tbk July 30, 1991
PT Merck Indonesia, Tbk July 23, 1981 Account Receivable = Credit Sales
PT Phapros, Tbk Dec 26, 2018 Receivable
PT Pyridam Farma, Tbk October 16, 2001
PT Merck sharp Dohme Pharma June 08, 1990 GPM (Y)
PT Industri Jamu & Farmasi Sido Dec 18, 2013 Gross Profit Margin is a percentage of gross profit
Muncul Tbk compared to sales [1]. The larger the gross profit margin, the
Tempo Scan Pasific January 17, 1994 better the company's operating conditions. The Gross Profit
Source: www.idx.co.id Margin (GPM) ratio can be calculated using the following
formula
With regard to the research sample, the sampling
technique in this study was purposive sampling. According to
Sugiyono [17] purposive sampling is sampling based on GPM = (Sales - Cost of Goods Sold)
certain criteria. The sample in this study amounted to 8 Sales
companies with the following sampling criteria:
 The company is a member of the pharmaceutical sub-
sector in Indonesia Data Analysis Technique
 Have financial report data for 4 years period 2015 – 2018 The data analysis technique in this study used SPSS
 The company has high current assets compared to fixed Statistics 24. This study tested the classical assumption test
assets in a row for 4 years from the 2015 – 2018 period first before the regression test. Classical assumption test is
needed to provide research results that are the Best Linear
Research Variable Unbiased Estimator [18]. Classical assumption test includes
The variables in this study consisted of independent normality, multicollinearity, autocorrelation, and
variables and dependent variables. The independent variable heteroscedasticity tests. If the regression model qualifies
is the variable that affects or causes the change or the classic assumption test, the next step is to analyze the results
emergence of the dependent (bound) variable. While the of the regression test to see the value of coefficient of
dependent variable is a variable that is influenced or becomes determination (R2), t-test and F-test.
a result because of the independent variable [17]. The
independent variables in this study are the asset structure
variable (X 1 ), inventory turnover (X 2 ), and accounts
receivable turnover (X 3 ). While the dependent variable in
this study is the ratio of GPM (Y).

IJISRT21JUL152 www.ijisrt.com 39
Volume 6, Issue 7, July – 2021 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165
IV. RESULTS AND DISCUSSION structure, inventory turnover, and receivables turnover of
39.7%. While the rest 60.3% is influenced by other variables.
The sample in this study amounted to 8 companies from
the pharmaceutical sub-sector listed on the Indonesia Stock Test (F-Test) is used to show whether all independent
Exchange. The variables in this study consist of asset variables as a whole or together have an influence on the
structure, inventory turnover, accounts receivable turnover, dependent variable [18]. This test was carried out using
and the GPM ratio. To see the descriptive data of the research a significance level of 0.05 (α = 5%). If the significance value
variables, the following is a descriptive statistical table of each is < 0.05, then the independent variables jointly have a
research variable: significant effect on the dependent variable.

Table 2. Descriptive Statistics Table 4. F Test Results

Source: SPSS Processed Data version 23

Source: Processed Data SPSS version 23
Based on the table above, it can be seen that companies
in the pharmaceutical sub-sector have a GPM ratio for the Based on the table above regarding the results of the
period 2015 – 2018 with an average value of 39.8%, the simultaneous test (F test) it can be seen that the F test value is
lowest value of 15.04% and a maximum value of 7.801 and is significant at 0.001 which means that the
56.99%. The asset structure of companies in the independent variables of asset structure, inventory turnover
pharmaceutical sub-sector in Indonesia for the period 2015 - and receivables turnover simultaneously or together affect
2018 has an average value of 2.68%, the lowest value of the ratio of GPM.
1.17% and a maximum value of 5.29%. Inventory turnover in
the pharmaceutical sub-sector in Indonesia for the period The t statistic test is basically used to show how far the
2015 - 2018 has an average value of 5.72%, the lowest influence of one independent variable individually in
value of 3.00% and a maximum value of 7.73%. Accounts explaining the dependent variable is. From the results of data
receivable turnover in the pharmaceutical sub-sector in processing through the SPSS program obtained as follows
Indonesia for the 2015 - 2018 period has an average value of
6.31%, the lowest value of 2.17% and a maximum value of Table 5. Results of t-Test
9.60%.

Based on the results of the classical assumption test, it is

known that this research data meets the classical assumption
test consisting of normality, multicollinearity,
heteroscedasticity tests. However, after the autocorrelation
test, it was found that there was an autocorrelation According
to I. Ghozali [18] one of methods to overcome the occurrence
Source: SPSS Processed Data version 23
of autocorrelation is to use the first difference method so that
in this study, before conducting the regression test, the first
Based on the table.5, the results of the partial test (t-test)
difference method was used to overcome the occurrence of
can be seen from the three independent variables, only
autocorrelation. After all the classical assumptions are met,
Inventory Turnover which has a significant value greater than
the following are the results of the coefficient of
0.05, which means that only inventory turnover has no effect
determination ( R 2 ) test, F-test, and t-test.
on the GPM ratio.
Table 3. Test Results R2
The asset structure has a significance coefficient value
of 0.005 based on the results of the t-test where the value is
smaller than 0.05 and has a negative coefficient, which means
that the asset structure has a partially negative and significant
effect on the Gross Profit Margin of pharmaceutical sub-
sector companies in Indonesia for the 2015-2018
period. Asset structure has a negative effect on GPM,
Based on the table 3, the test results the value of the meaning that the higher the current assets, the lower the
coefficient of determination R2 is 0.397. This means that the company's profitability as measured by the GPM ratio.
dependent variable, namely the profitability measured in Current assets are indeed needed by the company for the
manufacturing companies in the pharmaceutical sub-sector, is company's operational activities, but funds that are too much
influenced by the three independent variables, namely asset embedded in current assets are also not good for the company

IJISRT21JUL152 www.ijisrt.com 40
Volume 6, Issue 7, July – 2021 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165
because funds also need to be allocated to other assets that Firms,” Int. Rev. Bus. Res. Pap., vol. 3, no. March, pp.
can generate operating leverage so as to increase profits. 279–300, 2007, [Online]. Available:
http://www.bizresearchpapers.com/Paper 19.pdf.
Based on the results of the t-test, inventory turnover [6]. H. Rahmi, “Pengaruh Struktur Aktiva dan Struktur
has a coefficient value of 0.681 > 0.05, which means that Modal terhadap Profitabilitas pada PT Kimia Farma,
inventory turnover does not have a partial significant effect Tbk,” J. EMBA, vol. 1, no. 4, pp. 78–85, 2013.
on the Gross Profit Margin of companies in the [7]. I. Rahmawati and M. K. Mahfudz, “Analisis Pengaruh
pharmaceutical sub-sector in Indonesia for the 2015-2018 Perputaran Modal Kerja, Likuiditas, Struktur Modal,
period. This is in line with the results of research N. M. V. Sales Growth, Struktur Aktiva, Size Terhadap
Sari and I. G. A. N. Budiasih [12] showing that inventory Profitabilitas,” Diponegoro J. Manag., vol. 7, no. 4, pp.
turnover does not affect the company's gross profit margin . 1–14, 2018, [Online]. Available:
https://ejournal3.undip.ac.id/index.php/djom/article/vie
Based on the results of the t-test, receivables wFile/22387/20529.
turnover obtained a significance coefficient value of 0.001 < [8]. I. Lazaridis and D. Tryfonidis, “‘ The relationship
0.05 and has a negative coefficient which means that between working capital management and profitability
receivables turnover has a negative and partially significant of listed companies in the Athens Stock Exchange ,’” J.
effect on the Gross Profit Margin of pharmaceutical sub- Financ. Manag. Anal., vol. 30, no. 76, pp. 1–12, 2006.
sector companies in Indonesia for the 2015-2018 period. that [9]. L. D. Wikardi and N. T. Wiyani, “Pengaruh Debt To
accounts receivable turnover has a negative effect on gross Equity Ratio, Firm Size, Inventory Turnover, Assets
profit margin. This happens maybe because there are costs Turnover dan Pertumbuhan Penjualan terhadap
incurred by the company in an effort to convert receivables Profitabilitas (Studi Kasus pada Industri Makanan dan
into cash so that it has an impact on company profits. Minuman yang Terdaftar di BEI Periode 2011-2015),”
According to Eka Pratiwi & Ardini [16] receivable turnover J. Online Insa. Akuntan, vol. 2, no. 1, p. 234099, 2017.
shows the company's efficiency in managing its receivables. [10]. N. Sufiana and N. Purnawati, “Pengaruh Perputaran
The more accounts receivable turnover shows that the more Kas, Perputaran Piutang Dan Perputaran Persediaan
costs will be incurred by the company in collecting Terhadap Profitabilitas,” E-Jurnal Manaj. Univ.
receivables. Udayana, vol. 2, no. 4, p. 252877, 2013.
[11]. M. A. Canizio, “Pengaruh Perputaran Kas, Perputaran
V. CONCLUSION Piutang, Perputaran Persediaan Terhadap Profitabilitas
Pada Supermarket Timor Leste,” E-Jurnal Ekon. dan
This study aims to determine whether the structure of Bisnis Univ. Udayana, vol. 10, pp. 3527–3548, 2017.
assets, inventory turnover and accounts receivable turnover [12]. N. M. V. Sari and I. G. A. N. Budiasih, “Pengaruh Debt
affect the profitability of the pharmaceutical subsector To Equity Ratio, Firm Size, Inventory Turnover dan
registered company in Indonesia during the period 2015 - Assets Turnover Pada Profitabilitas,” E-Jurnal Akunt.
2018. Based on the results of t-test (partial test), it is known Univ. Udayana 6.2, vol. 2, no. September 2008, pp.
from only independent variable inventory turnover have a 261–273, 2014.
significant effect on the GPM ratio, the remaining other [13]. E. A. Rahayu and J. Susilowibowo, “Pengaruh
variables, namely the structure of assets and accounts Perputaran Kas, Perputaran Piutang Dan Perputaran
receivable turnover have a significant effect on the GPM ratio Persediaan Terhadap Profitabilitas Perusahaan
of companies in the pharmaceutical sub-sector listed on the Manufaktur,” J. Ilmu Manaj., vol. 2, no. 4, pp. 1444–
Indonesia Stock Exchange. Asset structure and receivable 1455, 2014.
turnover have a negative and significant impact on the Gross [14]. E. F. Brigham and J. F. Houston, Dasar - Dasar
Profit Margin of pharmaceutical sub-sector companies in Manajemen Keuangan. Salemba Empat, 2010.
Indonesia for the 2015-2018 period. [15]. E. S. Ramadita and L. Suzan, “Pengaruh Biaya Produksi
, Debt to equity ratio , dan Perputaran Persediaan
REFERENCES Terhadap Profitabilitas,” J. Aset (Akuntansi Riset), vol.
11, no. 1, pp. 159–168, 2019.
[1]. L. Syamsuddin, “Manajemen Keuangan Perusahaan,” [16]. A. Eka Pratiwi and L. Ardini, “Pengaruh Perputaran
Jakarta: PT Raja Grafindo Persada, 2011. Modal Kerja, Ukuran Perusahaan, Leverage dan
[2]. B. Riyanto, “Dasar - Dasar Pembelanjaan Perusahaan,” Perputaran Piutang Terhadap Profitabilitas,” J. Ilmu dan
Yogyakarta: BPFE, 2011. Ris. Akunt., vol. 8, no. 3, pp. 1–17, 2019, [Online].
[3]. Kasmir, “Pengantar Manajemen Keuangan,” Jakarta: Available:
Jakarta: Kencana, 2010. http://jurnalmahasiswa.stiesia.ac.id/index.php/jira/articl
[4]. F. Rahmiyatun and K. Nainggolan, “Pengaruh Struktur e/view/2321.
Aktiva, Perputaran Modal Dan Pendanaan Terhadap [17]. Sugiyono, Metode Penelitian Manajemen. Bandung:
Profitabilitas Perusahaan Farmasi,” J. Ecodemica, vol. Bandung: Alfabeta, 2016.
IV, no. 2, pp. 156–166, 2016, [Online]. Available: [18]. I. Ghozali, Aplikasi Analisis Multivariete. Semarang:
http://ejournal.bsi.ac.id/ejurnal/index.php/ecodemica. Semarang : Badan Penerbit Universitas Diponegoro,
[5]. A. Raheman and M. Nasr, “Working Capital 2016.
Management And Profitability – Case Of Pakistani

IJISRT21JUL152 www.ijisrt.com 41