Working Capital Turnover and Profitability Performance: Empirical Evidence from Indonesia's Tobacco Industry

This study aims to analyze the influence of the turnover of working capital elements on profitability in cigarette companies listed on the Indonesia Stock Exchange (IDX) during the period 2017–2024. The independent variables used include receivables turnover, inventory turnover, and operating debt turnover, while profitability is measured by the Return on Assets (ROA) ratio. Secondary data was obtained from the annual financial statements through the IDX's official website and analyzed using the multiple linear regression method with the help of SPSS software. The results of the study show that inventory turnover has a positive and significant effect on profitability, while the turnover of receivables and accounts payable has a insignificant effect. Simultaneously, the three independent variables had a significant effect on profitability with a determination coefficient (R²) of 0.543, which means that 54.3% of the variation in profitability could be explained by the three variables. These findings indicate that the efficiency of inventory management is a key factor in increasing the profitability of the cigarette industry in Indonesia. This research is expected to make a practical contribution for financial managers in optimizing working capital policies and enriching the empirical literature related to the relationship between working capital efficiency and financial performance in the manufacturing sector.