Working Capital Management's Impact on Profitability in Indonesia's Livestock Sector During COVID-19

Abstract

The COVID-19 pandemic has significantly impacted various industries, including the livestock industry, which faces liquidity and operational efficiency challenges. This study examines the effects of cash turnover, accounts receivable turnover, inventory turnover, and net working capital on the profitability of livestock companies listed on the Indonesia Stock Exchange during this period. This study aims to identify the most influential working capital management components for maintaining financial performance in this sector during a crisis. This research employed a quantitative approach using multiple regression analysis and was processed using SPSS version 25. Data were obtained from annual financial reports of livestock companies that consistently published financial statements during the 2020–2022 period using purposive sampling. The findings indicate that cash and inventory turnover have a significant positive effect on profitability, highlighting the importance of liquidity efficiency and inventory management in sustaining financial performance in this sector. Conversely, accounts receivable turnover and net working capital have no significant impact, suggesting that credit policies and working capital allocation does not directly determine profitability. This study provides insights for financial managers and investors on optimal working capital management strategies for the livestock industry, particularly in navigating economic uncertainty. Future research should incorporate external factors, such as government policies, feed price fluctuations and global market conditions, as well as expand the scope of financial variables to enhance understanding of the key determinants of profitability in this sector.