THE IMPACT OF THE UNPAYABLE ACCOUNTS RECEIVABLE ON THE LIQUIDITY LEVEL AT PT ABC

Abstract

The capability of a company to settle down its short-term liabilities hasbeen one factor to determine whether the financial of a company is good or not. Thiskind of capability is the liquidity level. One factor that has determined the company’sliquidity level whether it is huge or small one is depending on the total of the accountsreceivable owned by the company. The method of this research has applied theassociative descriptive method describing the connection of two or more variables.To identify the liquidity level of the company, it has been applying a proxy analysis ofliquidity ratio. Identifying the impact of the unpayable accounts receivable on theliquidity level has been applying a simple regression equation. The test result usingt-test has indicated a significant effect. Moreover, it has been noticed that the amountof unpayable account receivables has been determining the liquidity level of thecompany. The suggestion to increase the liquidity level is by reducing the totalamount of current liabilities.