THE EFFECT OF TOTAL DEBT AND WORKING CAPITAL ON NET INCOME IN RETAIL TRADING COMPANIES LISTED ON THE INDONESIA STOCK EXCHANGE FOR THE 2019-2021 PERIOD

The progress and profitability of a company are intricately linked to its financial management, specifically regarding total debt and working capital. This study aims to empirically examine the impact of Total Debt and Working Capital on Net Income in retail trade sub-sector companies listed on the Indonesia Stock Exchange during the period from 2019 to 2021. Employing quantitative research methods, the study employs purposive sampling to gather data. The sample comprises 24 companies. The study considers total debt and working capital as independent variables, while net income serves as the dependent variable. Secondary data is collected from the official website of the Indonesia Stock Exchange and analyzed using multiple linear regression analysis. The findings demonstrate that working capital has a significant partial effect on net income, and both total debt and working capital exhibit a positive and significant simultaneous effect on net income in retail trading companies listed on the IDX between 2019 and 2021.


INTRODUCTION
Economic globalization makes businesses or businesses in various countries develop very rapidly.Infrastructure growth in Indonesia also has an influence on business growth, especially in the retail sector so that it becomes increasingly competitive domestically, nationally and globally.The retail trade industry (retail) in Indonesia is currently showing the ability to progress with the increasing number of construction of retail shops in various places.Retail trade is a very popular industrial sector and has dominated the lives of Indonesian people for generations.Several factors become positive catalysts for national retail growth in the future.
Every company generally aims to obtain maximum profit.Profit for the company describes the company's growth, besides that profit is also a measure of the company's financial performance.Companies that have good financial performance will have an impact on the company.The success and development of a company can be seen from the way the company organizes and manages its funds to generate profits in a certain period.One of the components that affect the size of a profit is total debt and working capital.For companies that can manage these two things to the fullest and make the company survive in quite a long period of time.Research on retail trading companies listed on the IDX was conducted because they wanted to know how the effect of total debt and working capital on a company's profits.Based on table 1 above, the average total debt and average working capital in several years have increased but not followed by an increase in net profit growth.There are still fluctuations in net profit, which means that there are still companies that experience a decline in profits even though total debt and working capital have increased.It can be seen that the highest average total debt for three years was PT Sumber Alfaria Trijaya Tbk.This company uses this debt to help finance working capital needs in order to carry out daily business activities, so when the total debt is higher the company's profit will also increase.PT Sumber Alfaria Trijaya Tbk also has a high average net profit.The highest average working capital is PT Ace Hardware Indonesia Tbk.Proper management of working capital effectively and efficiently can increase company profits, because the greater the amount of working capital and the higher the turnover of working capital, the higher the profit earned by the company.Adding short-term and long-term debt and own capital is intended for expansion, namely expanding company activities, expanding production activities, expanding marketing activities with the aim of obtaining maximum profit.
The same research was also conducted by Ani Zahara and Rachma Zannati (2018: 163) in this study showing that total debt, working capital, and sales have a significant effect on net income.The T (partial) test in this study shows that total debt and sales have no significant effect on net income, while working capital has a significant effect on firm value.
The objective of this study is to examine the impact of Total Debt and Working Capital on Net Income in retail trade sub-sector companies listed on the Indonesia Stock Exchange for the period of 2019-2021.By analyzing data from 24 companies and utilizing multiple linear regression analysis, the study aims to provide empirical evidence on the relationship between these financial management variables and net income.The significance of this research lies in its contribution to the understanding of how total debt and working capital influence the profitability of retail trading companies.The findings will be valuable for industry practitioners, investors, and policymakers in making informed decisions related to financial management and performance in the retail sector.

THEORITICAL REVIEW 2.1. Financial statements
Financial statements are data that represent the company's financial condition and can also be used to describe the company's financial success, according to Fahmi (2014: 2).Munawir further (2014: 2) says "Financial reports are a very important tool for obtaining information regarding the financial position and results achieved by the company concerned".Baridwan (2009: 3) states that profit is an increase in capital (net assets) resulting from side transactions of business entities or transactions that rarely occur, as well as from all other transactions for events affecting the company during a certain period of time, unless those are generated from income.owner or investment.Profit is an important financial statement statistic with several applications.Profits are usually used as the basis for making investment decisions and are forecasted to determine future profits.According to Kasmir (2014) states that the notion of Net Profit is profit that has been reduced by company costs or expenses including taxes in a certain period.Based on the results of the above understanding, it can be concluded that net profit is the entire total revenue minus the total costs including taxes in a certain period.The following is the formula for calculating net profit: Net Profit = Profit Before Tax -Income Tax

Total Amoun of debt
According to Munawir (2007: 18) debt is defined as all of the company's unpaid financial commitments to third parties, where this debt is a source of finance or capital for the company that comes from creditors.From the above understanding, it can be concluded that debt is all of the company's financial obligations that have not been paid

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to third parties and originate from bank loans, financial institutions, or the issuance of debentures.According to Samryn (2011: 37), debt is divided into two categories in this study, namely long-term debt and short-term debt which has the following formulation: Debt = Short Term Debt + Long term Debt

Working Capital
Every company needs working capital which is used to fund the company's daily operations.In funding ongoing business operations, cash must be available.Working capital is an important component of all company activities.The main variable that affects the company's operations is working capital.According to Kasmir (2012: 260) working capital can be calculated using the following formula: Working Capital = Current Assets -Current Liabilities

RESEARCH METHODS
Quantitative data analysis was conducted using financial statements from companies in the retail trade sub-sector for the period of 2019-2021.The data collection technique employed was documentary research, which involved literature review and field research to observe financial reports and gather relevant data for analysis.The samples consisted of balance sheets and income statements of companies in the retail trade sub-sector during the specified period.
The research methodology involved several measurement techniques, including descriptive analysis, classical assumption tests, multiple linear regression tests, and hypothesis testing.Data for the study was obtained through documentation techniques, utilizing available Indonesian Stock Exchange records.
The following data analysis techniques were employed to determine the impact of total debt and working capital on net profit: 1) Descriptive Analysis Data management and conclusions were drawn using the SPSS application.This analysis aimed to examine the effect of Total Debt and Working Capital on the Net Income of retail trading companies listed on the Indonesia Stock Exchange between 2019 and 2021.
2) Classic Assumption Test Before conducting hypothesis testing, a classic assumption test was conducted to ensure that the chosen model was appropriate and capable of providing accurate results.The classic assumption tests included normality tests, multicollinearity tests, heteroscedasticity tests, autocorrelation tests, and linearity tests.
3) Multiple Linear Regression Analysis Multiple regression analysis was employed to determine the impact of the independent variables, Total Debt (proxied by X1) and Working Capital (proxied by X2), on the dependent variable, Net Income (Y).
4) Hypothesis Testing Hypothesis testing was conducted to determine the significant influence between the independent variables and the dependent variable.The testing included partial tests (t-test), simultaneous tests (F-test), and coefficient of determination tests.

Research Result 4.1.1. Descriptive Statistics Table 2. Descriptive Statistics Result
Source: processed data (2023) Based on table 2 above, total debt has an average value of 2,323,558,060,098.4450 and a standard deviation of 3,785,333,600,226.45000.The maximum value of total debt is 18,703,002,000,000.00and the minimum value is 17,571,276,558.00,then working capital has an average value of 514,847,676,828.1529and a standard deviation of 1,262,524,435,240.37770.The maximum value of total debt is 4,469,570,705,861.00 and the minimum value is -2,164,158,000,000.00.Net profit has an average value of 148,941,857,373.9229and a standard deviation of 497,007,199,092.86150.The maximum value of net profit is 1,950,991,000,000.00 and the minimum value is -1,214,602,000,000.00.

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Based on table 3, it can be seen that the data that has been tested is normally distributed because the Asymp sig value > 0.05, namely (0.973 > 0.05).Table 4 explains that the tolerance and VIF values of the two variables have fulfilled the conditions given or are free from multicollinearity symptoms because all the independent variables in the study have a VIF value of less than 10 and a tolerance value of more than 0.1, so it is said that the two independent variables are not have a relationship or correlation.
Table 5. Heteroscedasticity Test Source: Processed data (2023) Free from symptoms of heteroscedasticity because the significance value is > 0.05 for each variable.Based on the table above, if the total debt and working capital is 0 or constant, the net profit is -116,345,196,112.654meaning that without being affected by changes in total debt and working capital, the company's net profit is negative.The coefficient value of total debt is 0.074 and is positive, meaning that every increase in total debt by 1 rupiah will increase net profit by 0.074 rupiah assuming the other independent variables are zero.The working capital coefficient value is 0.180 and is positive, meaning that every increase in working capital by 1 rupiah will increase net profit by 0.180 rupiah assuming the other independent variables are zero.Based on the results of the partial test, it was found that total debt had a positive and significant effect on net income which was explained by the t statistic value obtained at 5.975 greater than t table, namely 0.67801 (5.975 > 0.67801) and the significance value obtained was 0.000 less than 0.05.So, the first hypothesis in this study is accepted.As https://ojs.transpublika.com/index.php/CASHFLOW/E-ISSN : 2809-8226 | P-ISSN : 2809-848X evidenced by the t-statistic value obtained at 4.819 greater than t table, namely 0.67801 (4.819 > 0.67801) and the significant value obtained at 0.000 is less than 0.05.In line with Kasmir's theory (2015: 256), namely for capital companies the function is to maximize the use of current assets in order to encourage profits and sales Simultaneous test results show that the F statistic value of 24.186 is greater than the F table which is 3.98 and a significance value of 0.000 is less than 0.05.This means that total debt and working capital jointly affect net income.This is certainly in line with (Sundari & Michell, 2022) which states that the total debt owned by a company will have an impact on the net profit it gets.

CONCLUSION
Based on the findings from the data analysis, it can be concluded that total debt has a significant impact on net income.This implies that a higher value of total debt can lead to an increase in net profit.Additionally, working capital also has a noteworthy influence on net profit, indicating that a higher value of working capital can contribute to higher net profit.Moreover, it is worth noting that both total debt and working capital play a role in influencing net income.Consequently, a higher value of both total debt and working capital can result in an overall increase in net income.
Based on the findings of the data analysis, it is clear that total debt and working capital have a significant impact on net income.To make the most of these insights, several recommendations can be made.Firstly, organizations should focus on effective debt management by monitoring and optimizing their debt levels.Maintaining a healthy debt-to-equity ratio and ensuring timely repayment can mitigate risks associated with excessive debt.Secondly, optimizing working capital is crucial.Streamlining inventory management, improving accounts receivable and payable processes, and implementing efficient cash flow management practices can maximize resources and positively impact net profit.
Additionally, conducting comprehensive financial analyses that encompass various key metrics, along with regular monitoring and forecasting, is essential.This allows for proactive decision-making, risk identification, and adjustment of financial plans to adapt to changing market conditions.By implementing these recommendations, organizations can enhance their financial position, optimize profitability, and achieve sustainable growth in the long term.

Table 6 . Autocorrelation Test Result Summary model b
Based on the table above, there is no positive autocorrelation because the value of d > dU (1.855 > 1.61482) and there is no negative autocorrelation because (4-d) > dU or (2.145 > 1.61482).

THE EFFECT OF TOTAL DEBT AND WORKING CAPITAL ON NET INCOME IN RETAIL TRADING COMPANIES LISTED ON THE INDONESIA STOCK EXCHANGE FOR THE 2019-2021 PERIOD Ni
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