Digital transformation and fixed asset turnover in improving the financial performance of manufacturing companies
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Lucellia Louise Gerardine Wamaty(1)
Department of Management, Faculty of Economics and Business, Universitas Trisakti
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Farah Margaretha Leon(2*)
Department of Management, Faculty of Economics and Business, Universitas Trisakti
(*) Corresponding Author
Keywords:
Cost To Revenue Ratio, Digital Transformation, Fixed Asset Turnover, Financial Performance, Manufacturing Companies, Revenue Growth Rate, Return On Assets
Abstract
Digital transformation has become a strategic imperative for manufacturing firms seeking to enhance financial performance and maintain competitiveness in an increasingly digital business environment. This study examines the effects of digital transformation and fixed asset turnover on the financial performance of manufacturing companies listed on the Indonesia Stock Exchange during the 2021–2025 period. A quantitative research design was employed using panel data regression analysis based on 180 firm-year observations selected through purposive sampling. The findings indicate that digital transformation has a positive and significant effect on financial performance, highlighting its role in improving organizational competitiveness and value creation. Fixed asset turnover contributes to cost efficiency but does not significantly enhance profitability. In addition, revenue growth positively influences financial performance, whereas financial leverage negatively affects it. Firm size and firm age are also found to influence cost efficiency. These results underscore the importance of digital transformation and effective asset utilization in strengthening firms' financial outcomes. The study contributes to the growing literature on digitalization and corporate performance by providing empirical evidence from Indonesia's manufacturing sector. However, the analysis is limited to publicly listed manufacturing companies over the 2021–2025 period. Future studies are encouraged to examine other industries, incorporate additional explanatory variables, and employ longer observation periods to provide a more comprehensive understanding of the determinants of financial performance.
Keywords: Cost To Revenue Ratio; Digital Transformation; Fixed Asset Turnover; Financial Performance; Manufacturing Companies ; Revenue Growth Rate; Return On Assets
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References
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Anokhin, S., Spitsin, V., Vukovic, D. B., & Maiti, M. (2026). Unpacking the relationship between sales growth and profitability. Strategic Business Research, 2(1), 100101. https://doi.org/10.1016/j.sbr.2026.100101
Anuno, F., Madaleno, M., & Vieira, E. (2024). Testing of Portfolio Optimization by Timor-Leste Portfolio Investment Strategy on the Stock Market. Journal of Risk and Financial Management, 17(2). https://doi.org/10.3390/jrfm17020078
Arhinful, R., & Radmehr, M. (2023). The Impact of Financial Leverage on the Financial Performance of the Firms Listed on the Tokyo Stock Exchange. SAGE Open, 13(4). https://doi.org/10.1177/21582440231204099
Baltagi, B. H. (2024). Hausman’S Specification Test for Panel Data: Practical Tips. Advances in Econometrics, 46, 13–24.
https://doi.org/10.1108/S0731-905320240000046002
Bobro, N., Lisova, R., Parfentieva, O., Dmytrovska, V., & Kyrylenko, S. (2025). Digital transformation for cost optimisation and sustainable business operations. European Journal of Sustainable Development, 14(2), 158-158.
Chen, X., & Lin, Y. (2026). The impact of ESG performance on ROA: Evidence from China. Journal of Asian Business and Economic Studies, 30(3), 234–252. https://doi.org/10.1108/AJAR-07-2025-0343
Dung, V. Q., Van Hieu, P., Van Hau, N., & Trang, T. T. T. (2026). The influence of size, financial leverage, and age on financial performance: A study of gasoline firms on the Vietnamese stock market. Edelweiss Applied Science and Technology, 10(2), 355-365.
Harman, E., & Çakmak, B. (2026). Turkish Journal of Agriculture - Food Science and Technology Performance Evaluation of Irrigation Efficiency , Managerial Effectiveness , and Water Economic Productivity in Consolidated Agricultural Lands : A Case Study of the Gündüzler Irrigation Scheme. 14(5), 1366–1376.
Haro-Sarango, A. (2026). Research methods for business students. In Multidisciplinary Latin American Journal (MLAJ) (Vol. 4, Number 1). https://doi.org/10.62131/mlaj-v4-n1-editorial
Herlanlam, Q. R., Ahmad, G. N., & Parlyna, R. (2026). Pengaruh Transformasi Digital Terhadap Kinerja Keuangan Melalui Efisiensi Operasional Pada Perbankan Periode 2015-2024. Jejak digital: Jurnal Ilmiah Multidisiplin, 2(1), 2233-2253.
Ifunanya, N. L., Ogundele, O. S., & Mahlaule, C. (2026). Audit Fee Determinants: The Influence of Corporate Governance Mechanisms in Nigerian Banking Industry. International Review of Management and Marketing , 16(1), 238–245. https://doi.org/10.32479/irmm.21406
Khoer, M., Mubaarok, S. H., Jaelani, I., Acim, A., & Mutakin, K. (2024). Pengaruh Current Ratio Dan Total Assets Turn Over Terhadap Return On Assets. Equilibrium: Jurnal Penelitian Pendidikan dan Ekonomi, 21(01), 104-112.
Kingdom, U., Aden, Z. M., Sciences, M., Ondigo, H., Lecturer, S., Sciences, M., Aduda, J., & Sciences, M. (2025). Effect Of Financial Risks On Performance. 13(9), 233–249.
Liu, J., Zhou, K., Zhang, Y., & Tang, F. (2023). The Effect of Financial Digital Transformation on Financial Performance: The Intermediary Effect of Information Symmetry and Operating Costs. Sustainability (Switzerland) , 15(6). https://doi.org/10.3390/su15065059
Ma, L., & Wang, F. (2026). R & D accounting choice and firm performance : disentangling signaling and opportunistic motives in capitalization.
https://doi.org/10.1108/CAFR-08-2025-0144
Nayottama, A. P., & Dewi, S. P. (2024). Pengaruh likuiditas, sales growth, leverage, dan firm size terhadap kinerja keuangan. Jurnal Paradigma Akuntansi, 6(4), 1933-1940.
Nguyen, T. A. N., & Nguyen, C. V. (2025). Factors affecting corporate financial performance listed on Vietnam stock market. Cogent Business & Management, 12(1), 2464937.
Nguyen, D. T., & Pham, T. Du. (2026). Determinant of Profitability: An Empirical Investigation of the Role of Financial Structure, Technological Innovation, and Managerial Attributes. Economies, 14(3), 1–16.
https://doi.org/10.3390/economies14030085
Nuseva, D., Dakić, S., Peštović, K., & Hladika, M. (2025). The impact of sales growth on manufacturing companies’ profitability in the Republic of Serbia–panel data analysis. Strategic Management-International Journal of Strategic Management and Decision Support Systems in Strategic Management, 30(1).
Ofori, B. S., Padi, A., & Musah, A. (2025). Corporate governance effectiveness, operational risk and financial performance of banks: The role of firm size. Economics, 13(2), 71-93.
Pascasarjana, S., Ibn, U., & Bogor, K. (2026). anajemen (E. 17(1), 256–267. https://doi.org/10.32832/jmuika.v17i1.22053
Phương Dung, N. T., Phuong Thao, H., My Tran, N., Tan Nghiem, L., & Thi Thu Trang, L. (2026). The impact of digital transformation on the financial performance of logistics enterprises. Journal of Defense Analytics and Logistics, 1–18. https://doi.org/10.1108/JDAL-04-2025-0011
Rahmadita, N., & Amri, A. (2024). Pengaruh Financial Leverage Dan Ukuran Perusahaan Terhadap Kinerja Keuangan Bank Umum Syariah Periode 2018-2022. Jurnal Ilmiah Manajemen, Ekonomi, & Akuntansi (MEA), 8(2), 207-227.
Ramadhani, W. R., & Nurullah, A. (2025). Pengaruh Rasio Keuangan Dan Firm Size Terhadap Kinerja Keuangan Perusahaan Consumer Non Cyclicals. VALUE, 6(2), 585-600.
Satria, R., & Molina, E. (2025). Pengaruh Gross Profit Margin, Debt To Equity Ratio Dan Total Assetturnover Terhadap Harga Saham Pada Pt Unilever Indonesia Tbk. Journal of Development Economics and Digitalization,
Tourism Economics, 2(3), 339–359. https://doi.org/10.70248/jdedte.v2i3.2758
Shafira, P., & Gantyowati, E. (2025). Transformasi Digital dan Kinerja Keuangan: Bukti Empiris dari Bank yang Terdaftar di Bursa Efek Indonesia. Jurnal Akuntansi dan Bisnis, 25(2), 225-239.
Shawat, R. S., Zamel, A., Otake, T., Sabry, S., & Badawy, H. (2024). How firm size shapes the ESG and financial performance nexus: Insights from the MENA region. Journal of Accounting and Auditing: Research & Practice, 15.
Shawat, S., Zamel, A., Otake, T., Sabry, S., & Badawy, H. (2024). How Firm Size Shapes the ESG and Financial Performance Nexus : Insights from The MENA Region. Journal of Accounting and Auditing: Research & Practice, 2024, 1–15.
Sulbahri, R. A., & Putri, Y. A. (2025). Transformasi digital dan kinerja perusahaan telekomunikasi: Bukti empiris di Indonesia. Jurnal Keuangan dan Bisnis, 23(1), 56-68.
Tran, H. T., Pham, Q. T. T., & Nguyen, P. V. (2026). Digital transformation solution implementation risk in logistics and supply chain industry. Discover Sustainability. https://doi.org/10.1007/s43621-026-02603-4
Valaskova, K., Nagy, M., & Juracka, D. (2025). Digital transformation and financial performance: an empirical analysis of strategic alignment in the digital age. Journal of Enterprising Communities: People and Places in the Global Economy, 19(5), 1178-1205.
Yuniar, W. (2026). Systematic Literature Review: Pengaruh Transformasi Digital terhadap Kinerja Keuangan dan Kinerja Operasional Perusahaan. Al-Zayn: Jurnal Ilmu Sosial & Hukum, 4(2), 7204-7220.
Zhang, S. (2026). The influence of digital transformation on chinese bank profitability performance. Plos One, 21(1 January), 1–20.
https://doi.org/10.1371/journal.pone.0340249
Zhou, Y., Ock, Y. S., Alnafrah, I., & Dagestani, A. A. (2023). What aspects explain the relationship between digital transformation and financial performance of firms?. Journal of Risk and Financial Management, 16(11), 479.
Published
2026-07-28
How to Cite
Wamaty, L., & Leon, F. (2026). Digital transformation and fixed asset turnover in improving the financial performance of manufacturing companies. Journal of Management : Small and Medium Enterprises (SMEs), 19(2), 1983-2001. https://doi.org/10.35508/jom.v19i2.29409
Section
Articles
