Good Monitoring and Control

Oct 13, 2025 by vinooalluri.com 62 views

Analysis of the Effect of Working Capital Policy on Liquidity Position in PT. PLN (Persero) NAD Region Lhokseumawe Branch

Introduction

Working capital management is a crucial aspect of a company's financial performance, as it directly affects the company's liquidity position. PT. PLN (Persero) NAD Region Lhokseumawe Branch, a leading electricity company in Indonesia, is no exception. The company's working capital policy plays a significant role in determining its liquidity position, which in turn affects its ability to meet its financial obligations. This study aims to analyze the effect of working capital policy on liquidity position in PT. PLN (Persero) NAD Region Lhokseumawe Branch.

Background

PT. PLN (Persero) NAD Region Lhokseumawe Branch is a subsidiary of PT. PLN (Persero), a state-owned electricity company in Indonesia. The company is responsible for providing electricity services to the NAD Region in Lhokseumawe, Aceh. As a leading electricity company, PT. PLN (Persero) NAD Region Lhokseumawe Branch faces significant challenges in managing its working capital, including managing inventory, accounts receivable, and accounts payable.

Methodology

This study uses the Spearman's Rank correlation analysis model to test the effect of three independent variables: current ratio, inventory turnover, and receivable turnover on liquidity position. The data were analyzed using the SPSS version 11.0 program. The study also uses a qualitative approach to analyze the results and provide recommendations for improving working capital management.

Results

The results of the study show that inventory turnover has an insignificant negative effect on liquidity position. This indicates that inventory management at PT. PLN (Persero) NAD Region Lhokseumawe Branch has not been optimal in increasing liquidity. Conversely, account receivable turnover has a significant positive influence on the position of liquidity. This means that good management of receivables can increase company liquidity.

Deeper Analysis

Negative Effects of Inventory Turnover

The results show that inventory turnover has a negative effect on liquidity. This may be caused by several factors, such as:

High Inventory: PT. PLN (Persero) NAD Region Lhokseumawe Branch may have high supplies for various reasons, such as:
- Anticipation of Demand: The company might store large amounts of inventory to anticipate the surge in demand.
- Deligious Delivery: Logistics or delays in the delivery of suppliers can cause inventory buildup.
- Difficulties in Sales: Inventory may be restrained due to lack of demand or difficulty in selling.
Outdated Inventory: The old inventory is stored can be obsolete and cannot be sold at a decent price, thereby reducing company liquidity.

Positive Effect of Account Receivable Turnover

The results show that account receivable turnover has a significant positive influence on liquidity. This indicates that PT. PLN (Persero) NAD Region Lhokseumawe Branch is able to manage receivables well, thereby increasing company liquidity. This can be caused by:

Effective Billing System: PT. PLN (Persero) NAD Region Lhokseumawe Branch has an effective billing system and can minimize late payment from customers.
Strict Credit Policy: The company applies a strict credit policy to minimize the risk of bad receivables.
Good Monitoring and Control: Receivables are monitored and strictly controlled to ensure that payments are made on time.

Recommendation

Optimization of Inventory Management

PT. PLN (Persero) NAD Region Lhokseumawe Branch needs to make efforts to optimize inventory management, such as:

Implement the Just-in-Time (JIT) system: The JIT system can help companies to reduce stored inventory and minimize storage costs.
Increasing the efficiency of supply chains: Improving the efficiency of supply chains can reduce late delivery and prevent inventory buildup.
Implement effective inventory management strategies: The company can use various inventory management strategies to determine the optimal amount of inventory that must be stored.

Improving the Management of Receivables

Although PT. PLN (Persero) NAD Region Lhokseumawe Branch has shown good management of receivables, the company can continue to improve it by:

Improving the Billing System: The company can improve the billing system by using more sophisticated technology, such as online billing systems.
Strengthening the Billing Team: The company can strengthen the billing team by providing adequate training and equipment.
Monitoring and evaluating billing performance: The company needs to be regularly monitoring and evaluating the performance of the billing team to ensure that the billing process is carried out effectively.

Conclusion

This study shows that the management of receivables has a significant influence on PT. PLN (Persero) NAD Region Lhokseumawe Branch. Companies need to improve inventory management and continue to strengthen the management of receivables to improve the company's liquidity and performance as a whole.
Frequently Asked Questions (FAQs) about the Effect of Working Capital Policy on Liquidity Position in PT. PLN (Persero) NAD Region Lhokseumawe Branch

Q: What is the main objective of this study?

A: The main objective of this study is to analyze the effect of working capital policy on liquidity position in PT. PLN (Persero) NAD Region Lhokseumawe Branch.

Q: What are the independent variables used in this study?

A: The independent variables used in this study are current ratio, inventory turnover, and receivable turnover.

Q: What is the significance of this study?

A: This study is significant because it provides insights into the effect of working capital policy on liquidity position in PT. PLN (Persero) NAD Region Lhokseumawe Branch, which can help the company to improve its liquidity position and overall performance.

Q: What are the limitations of this study?

A: The limitations of this study are:

The study only focuses on PT. PLN (Persero) NAD Region Lhokseumawe Branch and may not be generalizable to other companies.
The study only uses a quantitative approach and may not capture the qualitative aspects of working capital management.
The study only analyzes the effect of working capital policy on liquidity position and may not consider other factors that may affect liquidity position.

Q: What are the recommendations of this study?

A: The recommendations of this study are:

PT. PLN (Persero) NAD Region Lhokseumawe Branch should optimize its inventory management by implementing the Just-in-Time (JIT) system and increasing the efficiency of supply chains.
The company should continue to improve its management of receivables by improving the billing system, strengthening the billing team, and monitoring and evaluating billing performance.

Q: What are the implications of this study for PT. PLN (Persero) NAD Region Lhokseumawe Branch?

A: The implications of this study for PT. PLN (Persero) NAD Region Lhokseumawe Branch are:

The company should prioritize improving its working capital management to improve its liquidity position and overall performance.
The company should consider implementing the recommendations of this study to improve its working capital management.

Q: What are the implications of this study for other companies?

A: The implications of this study for other companies are:

Companies should prioritize improving their working capital management to improve their liquidity position and overall performance.
Companies should consider implementing the recommendations of this study to improve their working capital management.

Q: What are the future research directions based on this study?

A: The future research directions based on this study are:

Conducting a qualitative study to capture the qualitative aspects of working capital management.
Analyzing the effect of working capital policy on liquidity position in other companies.
Considering other factors that may affect liquidity position, such as market conditions and economic trends.

Q: What are the contributions of this study to the existing literature?

A: The contributions of this study to the existing literature are:

Providing insights into the effect of working capital policy on liquidity position in PT. PLN (Persero) NAD Region Lhokseumawe Branch.
Contributing to the existing literature on working capital management and liquidity position.
Providing recommendations for improving working capital management and liquidity position.