Analysis of Financial Performance in Tobacco Industry Companies Listed on the Indonesia Stock Exchange: The Roles of Profitability, Liquidity, and Solvency

Abstract

This study analyzes the effect of profitability, liquidity, and solvency on the financial performance of tobacco industry companies listed on the Indonesia Stock Exchange (IDX). A quantitative design was applied to secondary data taken from the annual financial statements of four companies over 2017–2024, which produced 32 firm-year observations (31 of which were usable in the regression). Profitability was measured by return on assets (ROA), liquidity by the current ratio (CR), solvency by the debt to equity ratio (DER), and financial performance by total asset turnover (TATO). The data were analyzed in SPSS version 27 using descriptive statistics, classical assumption tests, multiple linear regression, t-tests, an F-test, and the coefficient of determination at a 5% significance level. Profitability has a positive and significant partial effect on financial performance (B = 4.048; p = 0.001), whereas liquidity (B = 0.103; p = 0.093) and solvency (B = 0.014; p = 0.921) have positive but statistically insignificant effects. Simultaneously, the three variables significantly affect financial performance (F = 7.856; p = 0.001) and jointly explain 46.6% of its variation (adjusted R² = 40.7%). The findings indicate that the ability to generate profit from assets is the dominant factor associated with financial performance in this industry.