Return on equity shows how well a firm turns shareholder capital into profit. This study examines how working capital turnover, net profit margin, and equity multiplier affect return on equity among consumer non cyclicals companies listed on the Indonesia Stock Exchange. The study uses a quantitative associative design with secondary data from the annual financial reports of ten companies selected through purposive sampling and observed from 2021 to 2025, giving 50 firm year observations. The data were analyzed with panel data regression in EViews 12. The model selection tests point to the random effect model as the most suitable specification, and the classical assumption tests are satisfied. Net profit margin has a positive and significant effect on return on equity and is the strongest driver, although part of this strength reflects the DuPont identity in which both ratios share net income as the numerator. Working capital turnover has a positive and significant effect under the random effect model, but its significance is sensitive to the choice of model specification. Equity multiplier has a positive but insignificant effect. Together, the three variables have a significant effect on return on equity, with an adjusted R squared of 0.489. Companies are advised to keep cost control tight and manage working capital actively.
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Ananda et al. (2026) studied this question.
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