EFFECT OF RETURN ON ASSETS, TOTAL ASSETS TURNOVER QUICK RATIO AND INVENTORY TURNOVER OF DEBT TO ASSETS RATIO

EFFECT OF RETURN ON ASSETS, TOTAL ASSETS TURNOVER QUICK RATIO AND INVENTORY TURNOVER OF DEBT TO ASSETS RATIO Sri Fitri Wahyuni 1 fitri08_umsu@yahoo.com Salman Farisi 2 1,2 University of Muhammadiyah Sumatera Utara Abstract The purpose of this study was to determine the effect of Return On Assets, Total Assets Turnover, Quick Ratio and Inventory Turnover on the Debt to Assets Ratio and to determine the influence Return On Assets to Debt to Assets Ratio, Total Assets Turnover on the Debt to Assets Ratio, Quick Ratio on the Debt to Assets Ratio, Inventory Turnover on the Debt to Assets Ratio either partially or simultaneously on the company s Whole Sale (Durable & Non Durable Goods) listed on the Indonesia Stock Exchange. The approach used in this study is an associative approach. The sample in this study as many as fourteen companies company s Whole Sale (Durable & Non Durable Goods) listed on the Indonesia Stock Exchange. And observations made during the five years starting from 2010 to 2014. Data collection techniques in this study using documentation technique. Data analysis techniques in this study using Regression analysis, t test, F test and coefficient of determination. The results of this study prove that the partial Return On Assets significant effect on the Debt to Assets Ratio, partially Total Assets Turnover significant effect on the Debt to Assets Ratio, partially Quick Ratio significant influence on the Debt to Assets Ratio, partially Inventory Turnover no significant effect on Debt to Assets Ratio while simultaneously Return on Assets, Total Assets Turnover, Inventory Turnover Ratio and Quick significant effect on the Debt to Assets Ratio company s Whole Sale (Durable & Non Durable Goods) in the Indonesia Stock Exchange. Keywords : Return On Assets, Total Assets Turnover, Quick Ratio, Inventory Turnover and Debt to Assets Ratio INTRODUCTION Basically, every company has the same goal which is to make a profit. To achieve these objectives, the company is required to increase the value of the company. In addition, the company is also required to be able to manage the factors of ISBN 979-587-703-8 249

production that there is effectively and efficiently and innovate with the product in order to remain competitive in the global market. In creating and maintaining a good corporate necessary guidance and effective supervision. From some companies, funding sources are derived only from its own capital is less and therefore it is often companies obtained loans from external parties. Debt because it is temporary and not permanent are often the most important part of the capital structure. Nevertheless, lenders do not always want to lend money, especially if the company's credit risk is high. Harmono (2009) says that the capital structure is a variation of the composition of the capital structure changes that may alter the size weighted average cost of capital affect the assessment of the company. Capital structure theory is concerned with how capital is allocated in the company real asset investment activity by determining the capital structure between debt and equity capital. Basically, if a company increases the amount of debt as a source of funds that may increase financial risk. If the company is unable to manage the funds obtained from debt productively it can provide negative influence the company and vice versa. The higher the total value of the debt it will affect the capital resources obtained from external parties. This is because external parties consider that companies prioritize debt than managing capital are already available. This will cause the enterprise is difficult to obtain an investment. Kasmir (2010) says that the short-term debt or often referred to as a current liability or debt obligations to other parties that must be paid. The higher level of inventory turnover of a company, the higher the level of the company's ability to manage its debt. This is due to high inventory turnover will affect the profit that would be generated that would allow companies to repay the loan to the outside party. Whether it's a loan that has matured and long-term loans. Then Harmono (2009) says that the tipping moment is often called debt ratio is a series of management measures ranging from the sourcing of funding, scrutiny of internal business processes to support long-term asset investments, control of the market needs, and anticipate competitor. By using this ratio of the external party will be easy to determine the extent to which the management of community resources used and how the process of obtaining these funds and determine the extent of the company's products can be sold. 250 ISBN 979-587-703-8

LITERATURE REVIEW Debt to Assets Ratio (DAR) A company that solvable means that the company has sufficient assets to pay all its debts and vice versa, companies that do not have enough wealth to pay its debts referred to the company that insolvable. According to Raharjaputra (2011) "Debt ratio is the ratio used to measure the percentage of the total funds provided by the lender in the form of debt to total assets of the company". Meanwhile, according to Harahap (2013: 304) debt to assets ratio is the ratio that indicates the extent of the debt can be covered by assets ". Debt to assets ratio is a financial ratio used to measure how much a company's assets are financed by debt or how debt affects the asset management company. The lower the value Debt to Assets Ratio (DAR), the better the ratings of investors or creditors against the company so that investors or lenders will give to lend to the company. For companies it is important to know the factors that affect solvency. So that the company can determine the extent of the company's assets are financed by debt.. According to Sjahrial (2008) the factors that affect the solvency are as follows: 1) The level of sales 2) The asset structure 3) The growth rate of the company 4) The ability to generate profits 5) Variability of earnings and tax protection 6) Scale companies 7) The company's internal conditions and macroeconomic Return On Assets (ROA) The final goal to be achieved by the company is to obtain the maximum profit or gain. By obtaining the profit in accordance with the target company then the ISBN 979-587-703-8 251

company is considered to have managed production factors effectively and efficiently. To assess whether the company has been conducting its business properly, then be viewed using a profitability ratio. Kasmir (2010) says that the results of return on investment, or better known as the Return on Investment (ROI) or Return On Assets (ROA), a ratio that shows the results (return) on a number of assets used by the company. ROI is also a measure of the effectiveness of management in managing its investments, then Harahap (2013) says that the Return On Assets (ROA) is a ratio that describes how large the net profit obtained by the company when measured by the value of the assets. The higher rate of return on investment a company then means that the company has been able to improve the performance of the company so that the objectives of the company can be reached. Return On Assets or often translated into Indonesian as economic profitability measure the company's ability to generate profits in the past which can then be projected into the future to measure the ability of the company for the future. According to Munawir (2007) the magnitude of ROA influenced by two factors: 1) Turnover of operating assets (the asset turnover rate that is used for the operation) 2) Profit margin, namely the amount of the operating profit expressed as a percentage and total net sales. The profit margin measures the profit that can be achieved by a company associated with sales. The higher the turnover rate of assets used for the operation of the profit margin earned by the company, the higher it will affect the willingness of investors or creditors to invest, stop or proceed with its investment in the company. Total Assets Turnover (TATO) The ratio of activity (activity ratio) is a ratio used to describe the ability of companies utilize assets owned in obtaining revenue through the sale. Harahap (2013: 309) says that Total Assets Turnover (TATO) shows the asset turnover measured by the volume of sales in other words how far the ability of all assets create sales. And Kasmir (2012: 185) says that Total Assets Turnover is a ratio used to measure the velocity of all assets owned by the company and measure a number of sales derived from each rupiah asset. By using this ratio, the company will be able to know the extent to which the company's ability to manage existing assets by distributing the net sales of the venture capital companies. 252 ISBN 979-587-703-8

By using Total Assets Turnover (activity ratio) companies will be easier to measure how long the collection of accounts receivable, the company is also able to calculate the average accounts receivable, cash flow generated calculate and others. According to Riyanto (2010) that the level of Total Assets Turnover is determined by two factors: 1) With increase business capital (operating asset turnover) up to a certain level of achievement sought additional sales as much as possible; 2) By reducing sales to a certain extent cultivated a decrease or reduction of the maximum operating assets. Total Assets Turnover (TATO) is used to measure the venture capital and sales. The higher the sales turnover of the company, will accelerate the process of venture capital companies. Total Assets Turnover an asset manager last ratio, measuring the velocity or the benefit of all assets of the company. Harahap (2013) says that this ratio shows the asset turnover measured by the volume of sales in other words how far the ability of all assets create sales. Quick Ratio (QR) The liquidity ratio, or often called the working capital ratio is a ratio that illustrates the company's ability to meet obligations (debt) have short-term maturities. Libby, et al (2008: 716) said that fast ratio a liquidity test tool which is more stringent than the current ratio. The Quick ratio compares the asset quickly, which is defined as cash and near cash assets, against current liabilities. The Quick ratio is a measure of safety margin available to meet current liabilities of the company. Then, Raharjaputra (2011) says that the Acid test ratio / quick ratio is a ratio to measure a company's ability to meet the process by reducing the inventory is considered less liquid because the process is quite long, through the sale and then the accounts receivable or cash. By using the quick ratio is the lender or investor will determine the extent to which the company can meet or pay liabilities or current liabilities with current assets without taking into account the value of the stocks. Inventory is a current asset lowest liquidity level, frequent price fluctuations and often lead to losses in the event of liquidation. According to Kasmir (2012: 79) factors need to be considered divided into three parts: ISBN 979-587-703-8 253

1) The amount of investment in fixed prices compared with the rest of the longterm funding. The use of funds for the purchase of fixed assets is one of the causes of the state of a liquid. 2) The volume of corporate activities. Increased volume Integration activities will increase the need for funds to finance current assets. 3) Controlling current assets. If the less well to control the amount of investment in inventories and receivables led to their investment more than is supposed. The amount of investment, the volume of activity of the company and control of current assets are all factors that affect the liquidity ratio. By looking at the volume of activity of the company, investors will know the extent of the company's activities over the management of assets held so as to obtain appropriate return target. Inventory Turnover (ITO) To obtain the maximum profit companies must manage production factors effectively and efficiently. To determine whether these factors are managed well or not, it can be assessed through any activity undertaken by the company so that the company's target can be achieved. According to Raharjaputra (2011: 203) "Inventory Turnover is a ratio of the activity. This ratio measures the company's ability to sell its products in a given period, compared to the amount of inventory on hand ". Then, Munawir (2007) said inventory turnover (inventory turnover), the ratio of sales to average inventory are rated based on the sales price or, if possible, this ratio is calculated by comparing the cost of goods sold by average inventory. This ratio shows how many times the funds invested in stocks is rotating in one year/period. The bigger the better turnover means. High and low inventory turnover has a direct effect on the size of the capital invested in inventory. The higher turnover means faster-moving, which means shorter time bound capital in inventory. 254 ISBN 979-587-703-8

According to Riyanto (2010: 74) factors that affect the safety stock in a company, namely: 1) The risk of running out of supplies The size of the risk of running out of inventory depends on: a) The custom of handing the goods supplied by the company, whether they are the ordinary hand over the goods in accordance with the schedule that has been set or not. b) The size of the total raw material purchased at any time. c) Predictable or not the precise needs of raw materials for production. 2) The relationship between the cost of storage in a warehouse on the one hand with the costs to be incurred as a result of running out of supplies on the other. Which is an extra cost to be incurred when the other is out of stock between the purchase cost of emergency orders. In addition, we must also consider factors that affect the minimum inventory of finished goods, namely: a) The nature of the production schedule adjustment with extra orders. b) The competitive nature of the industry. c) The relationship between the cost of storage in a warehouse (carrying cost) and costs for running out of stock (stockout cost). The size of the risk of running out of inventory depends on the habits of the suppliers submit their goods to the company as well as the size of the total raw material purchased and the relationship between the cost of storage in a warehouse on the one hand with the costs to be incurred as a result of running out of supplies on the other hand is factors that affect safety stock. METHODS This research is associative, which aims to determine the effect of two or more variables. This study uses empirical secondary data, where the data obtained from the document by means of browsing on the official website of Indonesia Stock Exchange that is www.idx.co.id, While the approach of the study is a quantitative approach. The sample was fourteen companies and research data sources are the financial statements of the company s sub-sector Whole Sale (Durable & Non Durable Goods) listed on the Indonesia Stock Exchange. Data analysis techniques in the research are to use the classic assumption test, multiple linear regression, t- test, and F-test, as well as the coefficient of determination. FINDINGS ISBN 979-587-703-8 255

Research Result Regression Analysis Multiple linear regression analysis is used to determine the effect of independent variables on related variables. Multiple linear regression was used to test the effect of Return On Assets, Total Assets Turnover, Inventory Turnover Quick Ratio against Debt to Assets Ratio. A multiple linear regression equations can be formulated as follows: Y = 0.486 to 1.398 X1 + 0.114 X2 - X3 0,037-0,008 X4 + έ Table 1. Multiple Linear Regression Coefficients a Unstandardized Coefficients Standardized Coefficients Model B Std. Error Beta t Sig. 1 (Constant).486.046 10.453.000 Return On Assets -1.398.646 -.214-2.163.034 Total Assets Turnover.114.018.690 6.322.000 Quick Ratio -.037.016 -.227-2.362.021 Inventory Turnover -.008.007 -.104-1.007.318 a. Dependent Variable: Debt to Assets Ratio The equation can be described as follows: a) A value or a constant value of 0.486 indicates the direction of positive ties showed that the independent variables held constant, then the Debt to Assets Ratio has increased by 0.486 or the equivalent of 48.6%. b) Β1 value of -1.398 with a negative direction of the relationship indicates that any increase Return On Assets will be followed by a decrease in the Debt to Assets Ratio of 1.398 or by 139.8%, assuming the other independent variables held constant. 256 ISBN 979-587-703-8

c) Β2 value of 0.114 with the direction of a positive relationship indicates that any increase in Total Assets Turnover will be followed by a rise of Debt to Assets Ratio 0.114 or 11.4% assuming the other independent variables held constant. d) Β3 value of-0.037with the direction of a negative relationship indicates that any increase in the Quick Ratio will be followed decrease Debt to Assets Ratio of 0,037or by 3.7%, assuming the other independent variables held constant. e) Β4 value of 0,008 with the direction of a positive relationship indicates that any increase in Inventory Turnover will be followed by a rise of Debt to Assets Ratio 0,008 or by 0.8%, assuming other variables held constant. From table 2, show, Adjusted R-square value or the coefficient of determination is equal to 0.455. This figure indicates that the Debt to Assets Ratio (dependent variable) is able to be explained by Return On Assets, Total Assets Turnover, Quick Ratio. And Inventory Turnover (independent variables) of 45.50%, while the rest of 54.50% is explained by other causes that are not investigated by the researchers in this study. Hypothesis Testing To determine the value of the t statistic table used a significance level of 5% of degrees of freedom (degree of freedom) df = (nk) where n is the number of observed data, the test criteria used are: H0 if: -ttable t t table, at α = 5%, df = n-2 and H0 is rejected if: ttest> t table or -ttest <-ttable Return On Assets to the value of the Debt to Assets Ratio processing results shows that the indigo t = -2.163 and table = 1.995 with α = 5%. Thus -ttest value smaller than the value -ttable (-2.163 <-1.995) and the significance value of 0.034 (less than 0.050) means that H0 is rejected and Ha accepted. Based on these results concluded that H0 is rejected and Ha accepted which showed that partially was no significant effect on the Return on Assets Debt to Assets Ratio. Total Assets Turnover for the value of the Debt to Assets Ratio processing result shows that the value of t = 6.322 and ttable with α = 5% is found to be 1.995. Thus the value of ttest is greater than the value of ttable (6.322> 1.995) and a significant value of 0.000 (less than 0.050) means that H0 is rejected and Ha accepted. Based on these results concluded that H0 is rejected and Ha accepted which showed that partially was no significant effect on Total Assets Turnover Debt to Assets Ratio. To value the Quick Ratio Debt to Assets Ratio processing result shows that the value is ttest = -2.362 and ttable with α = 5% is found to be 1.995. Thus -ttest value smaller than the value -ttable (-2.362 <-1.995) and the significance value of 0.021 (less than 0.050) means that H0 is rejected and Ha accepted. Based on these ISBN 979-587-703-8 257

results concluded that H0 is rejected and Ha accepted which showed that partially was no significant effect Quick Ratio of Debt to Assets Ratio. Inventory Turnover for the value of the Debt to Assets Ratio processing result shows that the value of ttest = -1.007 and ttable with α = 5% is found to be 1.995. Thus ttest less than or equal to ttable and greater than or equal to -ttable (-1.995 <- 1.007 <1.995) and a significance value of 0.318 (greater than 0,050) means that H0 is accepted and Ha rejected. Based on these results concluded that H0 is accepted and Ha is rejected: it suggests that that partially no significant effect on the Inventory Turnover Debt to Assets Ratio. The F-statistic is used to test the influence of all independent variables together - together (simultaneously) on the dependent variable. Proof is done by comparing the value of the critical F (F table) with a value of F contained in the analysis of variance table. To determine the value of F table, the significance level used by 5% with degrees of freedom (degree of freedom) df = (nk-1) where n is the number of observed data, the test criteria used are: If the value of significance (F count Ftabel) then H0 is rejected and if the value of the significance (of F <F table), then H0 is accepted For processing above shows that the probability of F values of 2.51 is smaller than the F table at 15.375 with a significant level of 0.000.Based on these results it can be seen that the F test > Ftable (15.375> 2.51) so H0 is rejected and Ha accepted. So it can be concluded that the variability Return On Assets, Total Assets Turnover, Quick Inventory Turnover Ratio and together no significant effect on the Debt to Assets Ratio. Table 2. Partical Test (t-test) Coefficients a Unstandardized Coefficients Standardized Coefficients Model B Std. Error Beta t Sig. 1 (Constant).486.046 10.453.000 Return On Assets -1.398.646 -.214-2.163.034 Total Assets Turnover.114.018.690 6.322.000 Quick Ratio -.037.016 -.227-2.362.021 Inventory Turnover -.008.007 -.104-1.007.318 258 ISBN 979-587-703-8

Unstandardized Coefficients Standardized Coefficients Model B Std. Error Beta t Sig. 1 (Constant).486.046 10.453.000 Return On Assets -1.398.646 -.214-2.163.034 Total Assets Turnover.114.018.690 6.322.000 Quick Ratio -.037.016 -.227-2.362.021 Inventory Turnover -.008.007 -.104-1.007.318 a. Dependent Variable: Debt to Assets Ratio The Coefficient Of Determination (R-Square) In table 4 can be seen the results of the regression analysis as a whole showed the R-value of 0.697 indicates that the correlation or relationship Debt to Assets Ratio (dependent variable) and Return On Assets, Total Assets Turnover, Quick Ratio and Inventory Turnover (independent variables) have a level of relationship strong is equal to: D = R2 x 100% D = 0.697 x 100% D = 69.7% Value Adjusted R-Square or the coefficient of determination is equal to 0.455. This figure indicates that the Debt to Assets Ratio (dependent variable) is able to be explained by Return On Assets, Total Assets Turnover, Quick Ratio and Inventory Turnover (independent variables) of 45.50%, while the rest of 54.50% is explained by causes not examined by the researchers in this study. Then the standard error of the estimate is equal to 0.16624 or 0.17 where the smaller points to make a more appropriate regression model in predicting Debt to Assets Ratio. Discussion Influence Return On Assets to Debt to Assets Ratio The results obtained on the effect of Return On Assets to Debt to Assets Ratio company s Whole Sale (Durable & Non Durable Goods) in Indonesia Stock ISBN 979-587-703-8 259

Exchange (BEI). Partial results of hypothesis testing show that part was no significant effect on the Return on Assets Debt to Assets Ratio. It is stated that the Return On Assets has an influence on the Debt to Assets Ratio, in other words, if the value of Return on Assets increased the value of the debt as an indicator of Debt to Assets Ratio has decreased. Where the decline in debt that can be paid for by the profits rise. The results are consistent with research conducted by Suhendro (2006) as well as research conducted by Kusuma (2008) which states that the Return On Assets significantly affect the Debt to Assets Ratio. Meanwhile, according to the theory of Brigham and Houston (2010: 221) states that companies with a high rate of return on investment using a relatively small debt. A high return rate makes it possible to finance most of the funding requirements with internally generated funds. Arguing that the cost of internal funds better than the cost of internal funds. Based on the results of research conducted by the author in theory, opinion, as well as previous studies mentioned above regarding the effect of the Return on Assets Debt to Assets Ratio. The authors conclude that there is a match between the results with theory, opinion and previous studies that there is a significant influence on the Return on Assets Debt to Assets Ratio. Effect on Total Assets Turnover on the Debt to Assets Ratio Research results obtained on the effect of Total Assets Turnover on the Debt to Assets Ratio company s Whole Sale (Durable & Non Durable Goods) in Indonesia Stock Exchange partially concluded that no significant effect on Total Assets Turnover Debt to Assets Ratio. It states that Total Assets Turnover has an influence on the Debt to Assets Ratio, in other words, if the value of Total Assets Turnover has increased the value of the capital structure as an indicator of Debt to Assets Ratio increased. Where the asset turnover increases, then the company needs more capital to facilitate the production process. This is in line with the theory put forward by Sofyan (2013: 309) says that Total Assets Turnover (TATO) shows the asset turnover measured by the volume of sales in other words how far the ability of all assets create sales. The increase in Total Assets Turnovernya followed by an increase in the Debt to Assets Ratio, which means that the greater the amount of assets owned by the company can be used as collateral debt that companies will be easier to obtain external financing because the company is considered able to repay. According to the authors asset turnover can be used as a basis for planning and supervision of the company's capital structure that is ideal in the future. This is consistent with the results of research Seftianne (2011) and Ade (2011) which 260 ISBN 979-587-703-8

states that the Total Assets Turnover significant effect on the Debt to Assets Ratio. Moreover, these results also prove the theory proposed by RJ (2009: 296) which says that the state of the assets of high or low will provide an overview of asset turnover (Total Assets Turnover) and the advantages that can be achieved by the company from the turnover of assets (Total assets Turnover) is. A high asset will provide a high level overview of solvency so the lower the risk of companies in men cover the debts of the company. Based on the results of research conducted by the author in theory, opinion, as well as previous studies mentioned above regarding the effect of Total Assets Turnover on the Debt to Assets Ratio. The authors conclude that there is a match between the results with theory, opinion and previous studies that there is a significant influence on the Total Assets Turnover Debt to Assets Ratio. Effect of Quick Ratio of Debt to Assets Ratio Research results obtained on the effect of Quick Ratio of Debt to Assets Ratio company s Whole Sale (Durable & Non Durable Goods) in Indonesia Stock Exchange partially concluded that no significant effect Quick Ratio of Debt to Assets Ratio. It states that have an influence on the Quick Ratio, Debt to Assets Ratio, in other words, if the value of the Quick Ratio has increased the value of the debt as an indicator of Debt to Assets Ratio has decreased. And if the composition of debt in the capital structure is high enough, then the company needs sufficient guarantees of the company. Based on the results of research conducted by Nugroho (2006) which says that the partial Quick Ratio significant effect on the variable Debt to Assets Ratio, the greater the company's liquidity will affect the debt, where the greater value of this ratio is of course the greater the amount of equity capital that is embedded into the company. This is in line with the theory put forward by Kasmir (2010: 111) states that the quick ratio is a ratio which indicates the company's ability to pay shortterm obligations as they mature so that the total debt of the company becomes smaller. But it is different with the results of research conducted by Oemar dkk (2015) which says that the negative effect on the liquidity of the capital structure. This is not in accordance with the above theory proposed by Kasmir. Based on the results of research conducted by the author in, theory, opinion, as well as previous studies mentioned above regarding the effect of Quick Ratio of Debt to Assets Ratio. The authors conclude that there is a match between the results with theory, opinion and previous studies that there is a significant influence on the Quick Ratio Debt to Assets Ratio. ISBN 979-587-703-8 261

Effect on Inventory Turnover on Debt to Assets Ratio Research results obtained on the effect of Inventory Turnover on the Debt to Assets Ratio company s Whole Sale (Durable & Non Durable Goods) in Indonesia Stock Exchange can be concluded that partially no significant effect on the Inventory Turnover Debt to Assets Ratio. This means that the Inventory Turnover has not had an influence on the Debt to Assets Ratio, in other words, if the value of inventory Turnover decreasing the value of the debt as an indicator of Debt to Assets Ratio increased. Kasmir (2010: 218) says that the effect of the inventory turnover rate on working capital is quite important for the company. The smaller or lower the turnover rate, the higher working capital requirements, thus black otherwise. Thus, it takes a fairly high inventory turnover in order to minimize the risk of losses due to falling prices and be able to save storage costs and maintenance. The results are consistent with the results of research conducted by Margaretha and Ramadan (2010), as well as Supriyanto, and Falikhatun (2008) which states that the Inventory Turnover no significant effect on Debt to Assets ratio. The increase in assets due to increased inventory turnover with capital from debt means indicates that companies are less able to manage existing assets so that if the asset is increased, the debt will increase and thereby Debt to Assets Ratio will increase, so the higher the asset, the greater the Debt to assets ratio. Based on the results of research conducted by the author in theory, opinion, as well as previous studies mentioned above regarding the effect of the Inventory Turnover Debt to Assets Ratio. The authors conclude that there is no match between the results of the study with the theory, opinion and previous studies that there is a significant influence on the Debt to Assets Turnover Ratio. This is because in this study write Inventory Turnover get results that do not significantly affect the Debt to Assets Ratio. Table 3. Simultaneous Test (F-Test) ANOVA b Model Sum of Squares df Mean Square F Sig. 1 Regression 1.700 4.425 15.375.000 a Residual 1.796 65.028 Total 3.496 69 262 ISBN 979-587-703-8

a. Predictors: (Constant), Inventory Turnover, Quick Ratio, Return On Assets, Total Assets Turnover b. Dependent Variable: Debt to Assets Ratio Influence Return On Assets, Total Assets Turnover, Quick Inventory Turnover Ratio and against Debt to Assets Ratio The results obtained on the effect of Return on Assets, Total Assets Turnover, Quick Ratio and Inventory Turnover on the Debt to Assets Ratio in service companies sub-sector of large trade produced goods listed on the Indonesia Stock Exchange concluded that the variable Return On Assets, Total Assets Turnover, Quick Inventory Turnover Ratio and together no significant effect on the Debt to Assets Ratio trade sub-sector services company major production items listed in Indonesia Stock Exchange period from 2010 through 2014. It has a meaning greater Return On Assets of the company, the external capital structure will decrease, because of the higher the company's ability to manage existing assets so as to obtain a return that could ultimately be used for their own capital. By using capital from internal will reduce the tendency of companies to use debt as a primary funding. The results are consistent with the theory put forward by According Munawir (2007) Return on Assets is a ratio that measures the ability of companies with total funds invested in assets that were used for the operating company to make a profit. "By using these advantages, the company will be able to pay its obligations so that it can be concluded that the Return on Assets is one of the factors that affect Debt to Assets Ratio. Return On Assets, In addition, there are several other factors that affect the company's capital structure is Total Assets Turnover.Syafrida (2015: 123) says that Total Assets Turnover (TATO), the ratio to measure the efficiency of the overall assets during the period. The high Total Assets Turnover (TATO) demonstrates the effectiveness of the use of property companies. The higher the Total Assets Turnover, the higher the capital structure, which means the greater the total assets that can be used as collateral companies obtain funding from external parties and vice versa. According to Kasmir (2010 : 110) states that the liquidity ratio is the ratio that describes the ability of the company meet its short-term obligations. One measure used to calculate the liquidity is the Quick Ratio for with use this ratio then external parties will determine the extent to which the company is able to pay its liabilities or short-term debt using current assets. Apart from the three ISBN 979-587-703-8 263

factors above, there is one factor that affects IE Debt to Assets Ratio Inventory Turnover. Hendra (2008: 204) says that the company's inventory turnover shows the performance of the company in its operational activities. The higher the inventory turnover rate, the greater the likelihood the company will benefit. The Result is exactly what will be used to increase capital structure and reduce the tendency of debt. The results are consistent with research conducted by Alan and Lisbeth (2015) which says that the asset structure have a significant effect on the capital structure as well as research conducted by Nantyo (2014) in his research said that the profitability ratio (ROA), liquidity ratio (QR) and the activity ratio (TATO and ITO) significant and positive impact on the capital structure. Based on the results of research by the author and theories, opinions, as well as previous studies mentioned above regarding the effect of Return On Assets, Total Assets Turnover, Quick Inventory Turnover Ratio and together affect the Debt to Assets Ratio. The authors conclude that there is a match between the results of the study with the theories, opinions and previous research. Table 4. Coefficient of Determination Model Summary b Mo del R R Squar e Adjusted R Square Std. Error of the Estimate Durbin-Watson 1.697 a.486.455.16624 1.967 a. Predictors: (Constant), Inventory Turnover, Quick Ratio, Return On Assets, Total Assets Turnover b. Dependent Variable: Debt to Assets Ratio CONCLUSIONS Based on the results of research and discussion that has been stated previously, it can take conclusion of the study on the effect of Return On Assets, Total Assets Turnover, Quick Ratio and Inventory Turnover on the Debt to Assets Ratio in service companies sub sector Whole Sale (Durable & Non Durable Goods)is listed on the Stock Exchange Indonnesia period of 2010 s / d in 2014 with a population of 33 companies and taken a sample of 14 companies are as follows: 264 ISBN 979-587-703-8

1. There is a significant influence between the Return On Assets to Debt to Assets Ratio. This means that the Return On Assets increase will cause the Debt to Assets Ratio decreased. 2. There is a significant influence between Total Assets Turnover on the Debt to Assets Ratio. This means that the Total Assets Turnover increases will cause the Debt to Assets Ratio has increased as well. 3. There is a significant influence between Quick Ratio of Debt to Assets Ratio. Where the higher the company's ability to pay its current obligations at maturity. 4. There is no significant influence between the Inventory Turnover on the Debt to Assets Ratio. This means that the Inventory Turnover has no influence on the Debt to Assets Ratio. 5. There is a significant influence between the Return On Assets, Total Assets Turnover, Quick Inventory Turnover Ratio and against Debt to Assets Ratio. Suggestion 1. To reduce the debt (Debt to Assets Ratio) then the company should increase the value of Return on Assets by raising the value of the company's net income can then be used to pay the debts of the company, causing the value of the Debt to Assets Ratio may drop. 2. To reduce the debt (Debt to Assets Ratio) services company should trade subsector of the goods production increases the value of Total Assets Turnover by raising the level of corporate sales. With increased sales of the profit generated will increase which will cause the Debt to Assets Ratio value may drop. 3. To reduce the debt (Debt to Assets Ratio) should be a service company subsectors big trade of goods produced increases the value of the Quick Ratio by increasing the value of current assets that can then be used to pay the debts of the company, causing the value of the Debt to Assets Ratio may drop. 4. To reduce the debt (Debt to Assets Ratio) services company should trade subsector of the goods production increase Inventory Turnover value by increasing the value of sales companies which can then be used to pay the debts of the company, causing the value of the Debt to Assets Ratio may drop. With the increase in inventories, the production of a company will also increase, so that the sales volume could be improved. Then eventually the maximum profit can be used to pay the debts of the company. ISBN 979-587-703-8 265

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