Working Capital Management and Financial Performance of Property and Real Estate Companies: Risk Moderation

This study aims to examine the effect of working capital management (WCM) on the financial performance of property and real estate companies listed on the Indonesia Stock Exchange (IDX), while considering the moderating role of risk. The economic crisis triggered by the Covid-19 pandemic has exerted significant pressure on the liquidity and profitability of the property and real estate sector, thereby highlighting the critical importance of efficient working capital strategies. A quantitative approach was employed, utilizing secondary data from the audited financial statements of 36 companies over the period 2018–2023. The WCM variables analyzed include inventory conversion days (ICD), accounts receivable period (ARP), accounts payable period (APP), and cash conversion cycle (CCC). Risk was measured through systematic risk (Covid-19 impact) and firm-specific (annual stock price volatility). Financial performance was proxied by return on assets (ROA). Panel data regression and Wilcoxon Signed-Rank Test were used to compare pre-, during-, and post-pandemic conditions. The findings reveal that components of working capital management significantly influence ROA, with the CCC showing the most consistent negative effect. Furthermore, risk was found to moderate the relationship between working capital variables and firm performance under both stable and crisis conditions. Keywords: return on assets, unsystematic risk, systematic risk, property and real estate industry, working capital management