The Use of SPSS to Analyze the Relationship between Working Capital Management and Profitability

Abstract

Profit maximization is one of the shareholders’ goals from some firms’ investments. By
investing some of their money, investors want big returns of their investment. The
company can maximize its profit through a well management of its assets and use its
assets well in order to generate revenue. In this article, we test the relationship between
working capital management and profitability. We analyze and run multiple linear
regressions to test financial statements from Indonesia listed companies. The test is
done using Statistical Package for the Social Sciences (SPSS) Software. The results
show that Cash Conversion Cycle has significant positive relationship with return on
assets. The same direction with Cash Conversion Cycle, Net Trade Cycle also has
positive relationship with return on assets. Positive significant relationship is also
found in the relationship between return on assets and firm size. In contrast, debt ratio
has negative significant relationship over return on assets. It is also concluded that
SPSS can be used to analyze the relationship between working capital management and
profitability. Profit maximization can be reached through high Cash Conversion Cycle
and Net Trade Cycle, as indicators for Working Capital Management.