The effect of operating cash-flow and total asset turnover on profitability ratio in retail subsector companies listed on the Indonesia Stock Exchange during and after the pandemic
-
Kelvin Robert Kosasih(1*)
Department of Management, Faculty of Economics and Business, Padjadjaran University
-
Meinanda Kurniawan(2)
Department of Management, Faculty of Economics and Business, Padjadjaran University
(*) Corresponding Author
Keywords:
Operating Cash Flow, Total Asset Turnover, COVID-19 Pandemic, Return on Asset, Market Capitalization, Retail Company
Abstract
This study examines the effects of operating cash flow, total asset turnover, and the COVID-19 pandemic on return on assets (ROA) among retail sub-sector companies listed on the Indonesia Stock Exchange during 2020–2024. Using a quantitative research design, panel data regression with a fixed-effects model was employed to assess the proposed relationships. The findings indicate that operating cash flow and total asset turnover positively and significantly influence ROA, demonstrating that stronger operating cash generation and more efficient asset utilization contribute to higher profitability. In contrast, the COVID-19 pandemic has a significant negative effect on ROA, highlighting the adverse consequences of external economic disruptions on retail firms. Collectively, the explanatory variables account for more than 60% of the variation in ROA, indicating substantial explanatory power. These findings contribute to the corporate financial performance literature by demonstrating how internal financial efficiency and external crisis conditions jointly shape profitability in the Indonesian retail sector. From a managerial perspective, the results highlight the importance of strengthening operating cash flows, optimizing asset utilization, and developing organizational resilience to mitigate the effects of external shocks. The study is limited to listed retail firms in Indonesia and the 2020–2024 observation period. Future research could incorporate additional firm-specific and macroeconomic variables, examine other industries, and employ longer observation periods to provide broader insights into the determinants of corporate profitability.
Keywords: Operating Cash Flow; Total Asset Turnover; COVID-19 Pandemic; Return on Asset; Market Capitalization; Retail Company
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References
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https://doi.org/10.1177/1094428121991907
Sari, D. N., & Hermawan, S. (2023). Pengaruh Total Asset Turnover (Tato) dan Debt Ratio (Dr) terhadap Profitabilitas pada Perusahaan Sektor Makanan dan Minuman yang Terdaftar di BEI Periode Tahun 2015-2018. Innovative Technologica: Methodical Research Journal, 2(4). https://doi.org/10.47134/innovative.v2i4.10
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https://doi.org/10.3390/su14031128
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https://doi.org/10.29313/jra.v3i1.1763
Ahmad, K. K., Hasan Salih, K., & Saeed Sangawi, S. (2024). The Impact of Operating Cash Flow on Corporate Profitability: Amman Stock Exchange case study. Journal of Economics and Administrative Sciences, 30(140), 532–543. https://doi.org/10.33095/2gvf4697
Alkomsan, A. A. A. (2024). The Effect of Capital Structure, Total Assets Turnover, and Liquidity on The Financial Performance of Companies Listed on The Egyptian Stock Exchange. Al-Majallah al-‘Ilmiyyah Li al-Iqtisad Wa al-Tijarah (Scientific Journal of Economics and Commerce), 54(1), 117–160.
https://doi.org/10.21608/jsec.2024.348942
Allail, M. H., Singh, K., & Sharma, N. (2025). Decomposing Cash Flow Effects On Corporate Financial Performance: A Panel Study Of Nifty 50 Companies. International Journal Of Advanced Research In Commerce, Management & Social Science, 07(04(I)), 211–221. https://doi.org/10.62823/IJARCMSS/7.4(I).7077
Bhatti, S. H., Iqbal, K., Santoro, G., & Rizzato, F. (2022). The impact of corporate social responsibility directed toward employees on contextual performance in the banking sector: A serial model of perceived organizational support and affective organizational commitment. Corporate Social Responsibility and Environmental Management, 29(6), 1980–1994. https://doi.org/10.1002/csr.2295
Budiono, S., & Purba, J. T. (2023). Factors of foreign direct investment flows to Indonesia in the era of COVID-19 pandemic. Heliyon, 9(4).
https://doi.org/10.1016/j.heliyon.2023.e15429
Corporate Finance Institute. (2025). Profitability Ratios.
https://corporatefinanceinstitute.com/resources/accounting/profitability-ratios/
Dias, A. (2013). Market capitalization and Value-at-Risk. Journal of Banking and Finance, 37(12), 5248–5260. https://doi.org/10.1016/j.jbankfin.2013.04.015
Drake, P. P., & Fabozzi, F. J. (2010). The Basics of Finance.
Ducharme, J. (2020). World Health Organization Declares COVID-19 a ‘Pandemic.’ Here’s What That Means. https://time.com/5791661/who-coronavirus-pandemic-declaration/?utm_source=chatgpt.com
Etim, E. O., Daferighe, E. E., Enang, E. R., & Nyong, M. B. (2022). Cash Flow Management And Financial Performance Of Selected Listed Companies In Nigeria. Indo-Asian Journal Of Finance And Accounting, 3(1), 27–46.
https://doi.org/10.47509/IAJFA.2022.v03i01.03
Frank, M. Z., & Goyal, V. K. (2008). Trade-Off And Pecking Order Theories Of Debt. https://doi.org/https://doi.org/10.1016/B978-0-444-53265-7.50004-4
Ghozali, I., & Ratmono, D. (2017). Analisis Multivariat dan Ekonometrika.
Herdiyana, H., Sumarno, A., & Endri, E. (2020). The Effect of Financial Performance on the Profitability of Food and Beverage Companies in Indonesia. International Journal of Financial Research, 12(1), 30. https://doi.org/10.5430/ijfr.v12n1p30
Ika, S. M., & Hasan H. A. (2021). Dasar-Dasar Manajemen Keuangan. https://www.researchgate.net/publication/356251193
Karim, A., Widyarti, E. T., & Santoso, A. (2023). Effect of current ratio, total asset turnover, and size on profitability: Evidence from Indonesia manufacturing companies. Diponegoro International Journal of Business, 6(1), 57–63. https://doi.org/10.14710/dijb.6.1.2023.57-63
Kieso, D. E., Weygandt, J. J., & Warfield, T. D. (2014). Intermediate Accounting IFRS 2nd Edition.
KPMG. (2023). Statement of cash flows Handbook.
Kuvshinov, D., & Zimmermann, K. (2022). The big bang: Stock market capitalization in the long run. Journal of Financial Economics, 145(2), 527–552. https://doi.org/10.1016/j.jfineco.2021.09.008
Machmudi, M. I. Al. (2021). 88% Perusahaan Alami Kerugian Operasional Akibat Pandemi. https://mediaindonesia.com/ekonomi/385743/88-perusahaan-alami-kerugian-operasional-akibat-pandemi
Marzolf, M. J., Miller, J. W., & Peinkofer, S. T. (2024). Retail & wholesale inventories: A literature review and path forward. Journal of Business Logistics, 45(1). https://doi.org/10.1111/jbl.12367
Mathur, S. S., & Kenyon, A. (2001). The theory of winning resources (the resource-based view). In Creating Value: Successful Business Strategies (pp. 171–195). Elsevier. https://doi.org/10.1016/B978-0-7506-5363-3.50018-2
Montgomery, C. (1997). Books for Managers Resource-Based and Evolutionary Theories of the Firm: Towards a Synthesis edited by. In European Management Journal (Vol. 15, Number 2).
Mulyana, R. N. (2021). Bisnis ritel jadi salah satu sektor usaha yang terperosok paling dalam akibat pandemi. https://newssetup.kontan.co.id/news/bisnis-ritel-jadi-salah-satu-sektor-usaha-yang-terperosok-paling-dalam-akibat-pandemi?
Myers, S. C. (1984). The Capital Structure Puzzle. The Journal of Finance, 39(3), 575. https://doi.org/10.2307/2327916
Rajagukguk, J., & Siagian, H. (2021). The Effect of Liquidity and Total Asset Turnover on Profitability: Research Study n Pharmaceutical Companies in Indonesia Stock Exchange. Ekonomis: Journal of Economics and Business, 5(2), 444. https://doi.org/10.33087/ekonomis.v5i2.400
Retanubun, C. D., Mahadwartha, P. A., & Murhadi, W. R. (2024). The Impact of Capital Structure on Firm Performance: Covid 19 Case.
https://insyma.org/proceedings/items/show/293
Riyandi, S. (2025). Deretan Supermarket yang Tutup dalam 5 Tahun Terakhir, Ada Giant dan Lulu.
https://www.msn.com/id-id/ekonomi/ekonomi/deretan-supermarket-yang-tutup-dalam-5-tahun-terakhir-ada-giant-dan-lulu/
Rompotis, G. G. (2024). Financial performance and cash flow: Evidence from the US banking industry. Research Papers in Economics and Finance, 8(1), 61–90. https://doi.org/10.18559/ref.2024.1.1042
Rönkkö, M., Aalto, E., Tenhunen, H., & Aguirre-Urreta, M. I. (2022). Eight Simple Guidelines for Improved Understanding of Transformations and Nonlinear Effects. Organizational Research Methods, 25(1), 48–87.
https://doi.org/10.1177/1094428121991907
Sari, D. N., & Hermawan, S. (2023). Pengaruh Total Asset Turnover (Tato) dan Debt Ratio (Dr) terhadap Profitabilitas pada Perusahaan Sektor Makanan dan Minuman yang Terdaftar di BEI Periode Tahun 2015-2018. Innovative Technologica: Methodical Research Journal, 2(4). https://doi.org/10.47134/innovative.v2i4.10
Schweser, K. (2022). Financial statement analysis. Kaplan.
Sohibien, G. P. D., Laome, L., Choiruddin, A., & Kuswanto, H. (2022). COVID-19 Pandemic’s Impact on Return on Asset and Financing of Islamic Commercial Banks: Evidence from Indonesia. Sustainability, 14(3), 1128.
https://doi.org/10.3390/su14031128
Sugiyanto, E. K., Subagyo, E., Adinugroho, W. C., Jacob, J., Berry, Y., Nuraini Ani, Sudjono, & Syah, S. (2022). Konsep Dan Praktik Ekonometrika Menggunaakn Eviews.
Sugiyono. (2023). Metode Penelitian Kuantitatif, Kualitatif, Dan R&D.
www.cvalfabeta.com
Tajeddini, K., Gamage, T. C., Tajdini, J., Qalati, S. A., & Siddiqui, F. (2023). Achieving sustained competitive advantage in retail and consumer service firms: The role of entrepreneurial orientation and entrepreneurial bricolage. Journal of Retailing and Consumer Services, 75. https://doi.org/10.1016/j.jretconser.2023.103495
Wahndaloh, O. O. A., & Mule, R. K. (2022). Operational Cash Flow and Return on Asset of Listed Manufacturing Firms in Kenya: A Panel Analysis. The International Journal of Business & Management.
https://doi.org/10.24940/theijbm/2022/v10/i9/BM2209-015
Wooldridge, J. M. (2010). Econometric Analysis of Cross Section and Panel Data.
Yahya, U. H. D. (2025). Sektor Ritel Jadi Tulang Punggung Perekonomian dan Perdagangan RI. https://wartaekonomi.co.id/read565022/sektor-ritel-jadi-tulang-punggung-perekonomian-dan-perdagangan-ri
Published
2026-11-01
How to Cite
Kosasih, K., & Kurniawan, M. (2026). The effect of operating cash-flow and total asset turnover on profitability ratio in retail subsector companies listed on the Indonesia Stock Exchange during and after the pandemic. Journal of Management : Small and Medium Enterprises (SMEs), 19(3), 2159-2174. https://doi.org/10.35508/jom.v19i3.24416
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Articles
