Understanding the Importance of Profitability

Oct 13, 2025 by thesweetdesigns.com 106 views

Analysis of the Effect of Working Capital on Profitability in PT. Semen Indonesia (Persero) Tbk for the period 2015 - 2017

Introduction

Understanding the Importance of Profitability Profitability is a crucial measure that reflects the success and survival of a company. It is a key indicator that helps investors, stakeholders, and management assess the company's performance and make informed decisions. In the context of PT. Semen Indonesia (Persero) Tbk, this analysis focuses on the relationship between working capital and profitability during the 2015 to 2017 period.

Working Capital and Its Impact on Profitability

Defining Working Capital Working capital is the funds used by companies to run daily operations, including to meet short-term obligations and support production activities. It is a vital component of a company's financial management, as it enables the company to maintain operational smoothness and maximize opportunities to generate profits.
The Role of Working Capital in Profitability Adequate and well-managed working capital is essential for a company's profitability. It helps the company to reduce costs, increase efficiency, and improve its ability to obtain profits. Conversely, inadequate or inefficient working capital can hamper company activities and reduce profitability potential.

Analysis of PT. Semen Indonesia's Working Capital and Profitability

Data Analysis From the analysis conducted on PT. Semen Indonesia during the 2015-2017 period, there was a fluctuation in the value of Net Profit Margin (NPM) and working capital. Data shows that in 2015, NPM experienced a significant increase in line with the increase in the company's working capital. This increase is caused by effective cost management and stable sales. However, in the following years, even though working capital remains at a relatively good level, NPM has decreased. This indicates the challenges faced by the company in reducing operational costs and increasing efficiency.
External Factors Affecting Profitability External factors such as market conditions and industrial competition also affect profitability. During that period, PT. Semen Indonesia must compete with other cement companies that also increase their production capacity. Therefore, although working capital is well managed, challenges from the market side can affect the final outcome in the form of profitability.

Conclusion and Recommendations

Importance of Working Capital Management Based on the analysis above, it is essential for the management of PT. Semen Indonesia to continue to monitor and evaluate working capital management and profitability. Strategies that are more focused on reducing costs, increasing operational efficiency, and development of new products can be a step that needs to be taken to increase NPM.
Long-Term Sustainability In conclusion, working capital has a significant influence on profitability, and careful management can have a positive impact on the sustainability of the company in the long run. By understanding the importance of working capital and its impact on profitability, companies can make informed decisions to improve their financial performance and achieve long-term success.

Recommendations for Future Research

Further Analysis Future research can focus on further analyzing the relationship between working capital and profitability in PT. Semen Indonesia. This can include examining the impact of other factors such as market conditions, industrial competition, and cost management on profitability.
Case Studies Case studies can be conducted on other companies in the cement industry to compare and contrast their working capital management and profitability. This can provide valuable insights into the best practices and strategies for improving profitability.

Limitations of the Study

Data Availability The study is limited by the availability of data, which only covers the period from 2015 to 2017. Future research can focus on collecting and analyzing data for a longer period to provide a more comprehensive understanding of the relationship between working capital and profitability.
Methodology The study uses a descriptive analysis approach, which may not provide a comprehensive understanding of the relationship between working capital and profitability. Future research can use more advanced statistical methods to analyze the data and provide a more accurate understanding of the relationship.

Conclusion

In conclusion, the analysis of the effect of working capital on profitability in PT. Semen Indonesia (Persero) Tbk for the period 2015-2017 highlights the importance of working capital management in achieving profitability. The study provides valuable insights into the relationship between working capital and profitability and recommends strategies for improving profitability. Future research can focus on further analyzing the relationship between working capital and profitability and conducting case studies on other companies in the cement industry.
Q&A: Analysis of the Effect of Working Capital on Profitability in PT. Semen Indonesia (Persero) Tbk for the period 2015 - 2017

Q: What is the importance of profitability in a company?

A: Profitability is a crucial measure that reflects the success and survival of a company. It is a key indicator that helps investors, stakeholders, and management assess the company's performance and make informed decisions.

Q: What is working capital, and how does it impact profitability?

A: Working capital is the funds used by companies to run daily operations, including to meet short-term obligations and support production activities. Adequate and well-managed working capital is essential for a company's profitability, as it helps to reduce costs, increase efficiency, and improve the ability to obtain profits.

Q: What was the analysis conducted on PT. Semen Indonesia during the 2015-2017 period?

A: The analysis conducted on PT. Semen Indonesia during the 2015-2017 period showed a fluctuation in the value of Net Profit Margin (NPM) and working capital. Data shows that in 2015, NPM experienced a significant increase in line with the increase in the company's working capital. However, in the following years, even though working capital remains at a relatively good level, NPM has decreased.

Q: What external factors affect profitability?

A: External factors such as market conditions and industrial competition also affect profitability. During that period, PT. Semen Indonesia must compete with other cement companies that also increase their production capacity. Therefore, although working capital is well managed, challenges from the market side can affect the final outcome in the form of profitability.

Q: What strategies can be taken to increase NPM?

A: Strategies that are more focused on reducing costs, increasing operational efficiency, and development of new products can be a step that needs to be taken to increase NPM.

Q: What is the long-term sustainability of a company?

A: Long-term sustainability is the ability of a company to maintain its financial performance and achieve success over a long period. Careful management of working capital can have a positive impact on the sustainability of the company in the long run.

Q: What are the limitations of the study?

A: The study is limited by the availability of data, which only covers the period from 2015 to 2017. Future research can focus on collecting and analyzing data for a longer period to provide a more comprehensive understanding of the relationship between working capital and profitability.

Q: What are the recommendations for future research?

A: Future research can focus on further analyzing the relationship between working capital and profitability in PT. Semen Indonesia. This can include examining the impact of other factors such as market conditions, industrial competition, and cost management on profitability. Case studies can also be conducted on other companies in the cement industry to compare and contrast their working capital management and profitability.

Q: What is the conclusion of the study?

A: In conclusion, the analysis of the effect of working capital on profitability in PT. Semen Indonesia (Persero) Tbk for the period 2015-2017 highlights the importance of working capital management in achieving profitability. The study provides valuable insights into the relationship between working capital and profitability and recommends strategies for improving profitability.