The Effect of Working Capital Turnover, Company Size, and Company Age on Profitability: Study on State-Owned Banks in Indonesia

Abstract

This research aims to learn more about how working capital turnover (WCT), total assets as a metric of firm size, and firm age affect profitability as measured by ROE. The primary data source in this quantitative study comes from yearly accounts of state-owned banks obtained on the www.idx.co.id website. Multiple linear regression analysis and descriptive statistical analyses which have been used in the past under a classical assumption test, are also methods of data analysis. The results of work capital turnover and company age were not significant in relation to the ROE, based on data analysis and partial test results. In particular, the size of firms is a variable which has significant impact on return on equity. In part, the profitability of state-owned banks was not significantly influenced by independent variables in this study. Therefore, it is necessary to add appropriate independent variables that may have an impact on the profitability and which can be used in different data analysis techniques.