The Effect of Net Sales on Operating Profit at PT Ultrajaya Milk Industry & Trading Company, Tbk

Abstract

The relationship between net sales and operating profit is important for evaluating whether sales growth is effectively converted into operational profitability, particularly in the competitive food and beverage industry. This study aimed to examine the effect of net sales on operating profit at PT Ultrajaya Milk Industry & Trading Company Tbk during the period of 2005–2014. A quantitative descriptive and verification approach was employed using secondary data obtained from the company’s annual financial statements. The sample consisted of 10 annual observations selected through purposive sampling. Data were analyzed using Pearson correlation analysis, simple linear regression, the coefficient of determination, and a partial t-test using SPSS version 22. The results showed that net sales increased consistently, while operating profit fluctuated throughout the observation period. Pearson correlation analysis produced r = 0.885, indicating a very strong positive relationship between net sales and operating profit. The regression model was Y = ?86,798.42 + 0.137X, and the coefficient of determination was R² = 0.782, indicating that 78.2% of the variation in operating profit was explained by net sales. The t-test result (t = 5.364; p = 0.001) confirmed a statistically significant positive effect. Therefore, higher net sales significantly contributed to increased operating profit, although other operational factors also influenced profitability. These findings emphasize the importance of achieving effective sales growth while maintaining disciplined cost control to improve financial performance.