The Role of Total Asset Turnover in Financial Performance

Oct 13, 2025 by windailys.com 90 views

Uncover the key to the success of telecommunications companies: the role of total assets of turnover, current ratio, and intellectual capital

Improving financial performance is the main target for every company, including companies in the telecommunications subsector. Financial performance is a crucial aspect of a company's success, as it directly affects the company's ability to generate revenue, pay off debts, and invest in future growth. However, what are the factors that can affect the company's financial performance in this sector?

This study examines the effect of total asset turnover, current ratio, and intellectual capital on the financial performance of telecommunications subsector companies listed on the Indonesia Stock Exchange (IDX) during the 2017-2021 period. The study uses a quantitative approach with causal associative methods, involving 15 telecommunications sub-sector companies listed on the IDX as the research population. The data analysis technique used is multiple linear regression with the help of the IBM SPSS Statistics program 26.

The Role of Total Asset Turnover in Financial Performance

Total Asset Turnover is a ratio that measures how efficient the company is in utilizing its assets to generate income. The higher Total Asset Turnover, the more efficient the company in managing its assets. This ratio is an important indicator of a company's ability to generate revenue from its assets. Companies with high Total Asset Turnover ratios tend to have better financial performance, as they are able to generate more income from their assets.

The Role of Current Ratio in Financial Performance

Current Ratio is a ratio that measures the company's ability to pay off its short-term obligations with current assets. The high Current Ratio ratio shows that the company has good liquidity and is able to meet its financial obligations. This ratio is an important indicator of a company's ability to manage its short-term debt and maintain good liquidity. Companies with high Current Ratio ratios tend to have better financial performance, as they are able to meet their short-term obligations and maintain good liquidity.

The Role of Intellectual Capital in Financial Performance

Intellectual Capital is an intangible asset owned by the company, such as employee knowledge, expertise, and experience. Value Added Human Capital measures how much human resource contribution to increase the added value of the company. Meanwhile, Structural Capital Value Added shows the contribution of intangible assets such as systems and technology to increasing company added value. Intellectual capital is an important indicator of a company's ability to innovate and create value. Companies with high intellectual capital tend to have better financial performance, as they are able to create new products and services and increase their revenue.

Implications and Recommendations

This study provides several implications and recommendations for telecommunications sub-sector companies in Indonesia:

Increasing asset efficiency: Companies need to focus on increasing the efficiency of the use of assets in order to generate greater income. This can be achieved by implementing cost-saving measures, improving operational efficiency, and investing in new technologies.

Increased liquidity: The company must maintain good liquidity to ensure the company's ability to meet its short-term obligations. This can be achieved by maintaining a high Current Ratio, reducing debt, and increasing cash reserves.

Human resource development: Companies need to increase investment in the development of human resources in order to increase employee contributions to increasing company added value. This can be achieved by providing training and development programs, promoting employee engagement, and creating a positive work culture.

Evaluation of intangible assets: The company needs to evaluate the contribution of intangible assets such as systems and technology to financial performance. This can be achieved by conducting regular audits, assessing the impact of intangible assets on financial performance, and making adjustments as needed.

Conclusion

This study confirms that total asset turnover, current ratio, and value added human capital have a positive and significant influence on the financial performance of the telecommunications subsector company. Telecommunications companies can take advantage of the results of this study as a guide in formulating strategies to improve their financial performance in the future. By focusing on increasing asset efficiency, maintaining good liquidity, developing human resources, and evaluating intangible assets, telecommunications companies can improve their financial performance and achieve long-term success.

Limitations of the Study

This study has several limitations that should be noted. Firstly, the study only examines the effect of total asset turnover, current ratio, and intellectual capital on financial performance, and does not consider other factors that may affect financial performance. Secondly, the study only examines telecommunications sub-sector companies listed on the IDX, and does not consider other companies in the telecommunications industry. Finally, the study only examines the 2017-2021 period, and does not consider other time periods.

Future Research Directions

This study provides several future research directions. Firstly, future studies can examine the effect of other factors on financial performance, such as market share, customer satisfaction, and employee engagement. Secondly, future studies can examine the effect of total asset turnover, current ratio, and intellectual capital on financial performance in other industries, such as manufacturing, retail, and healthcare. Finally, future studies can examine the effect of total asset turnover, current ratio, and intellectual capital on financial performance in other time periods, such as the 2020-2025 period.

References

This study uses a quantitative approach with causal associative methods, involving 15 telecommunications sub-sector companies listed on the IDX as the research population. The data analysis technique used is multiple linear regression with the help of the IBM SPSS Statistics program 26. The study uses a variety of sources, including financial statements, annual reports, and industry reports.

Conclusion

In conclusion, this study provides a comprehensive analysis of the effect of total asset turnover, current ratio, and intellectual capital on financial performance in telecommunications sub-sector companies listed on the IDX. The study confirms that total asset turnover, current ratio, and value added human capital have a positive and significant influence on financial performance. Telecommunications companies can take advantage of the results of this study as a guide in formulating strategies to improve their financial performance in the future.

Q: What is the main objective of this study?

A: The main objective of this study is to examine the effect of total asset turnover, current ratio, and intellectual capital on financial performance in telecommunications sub-sector companies listed on the Indonesia Stock Exchange (IDX) during the 2017-2021 period.

Q: What is the significance of this study?

A: This study is significant because it provides a comprehensive analysis of the factors that affect financial performance in telecommunications sub-sector companies. The findings of this study can be used as a guide for telecommunications companies to improve their financial performance and achieve long-term success.

Q: What are the key findings of this study?

A: The key findings of this study are that total asset turnover, current ratio, and value added human capital have a positive and significant influence on financial performance in telecommunications sub-sector companies. This means that companies that are able to manage their assets efficiently, maintain good liquidity, and invest in human resources effectively tend to have better financial performance.

Q: What are the implications of this study?

A: The implications of this study are that telecommunications companies need to focus on increasing asset efficiency, maintaining good liquidity, developing human resources, and evaluating intangible assets in order to improve their financial performance.

Q: What are the limitations of this study?

A: The limitations of this study are that it only examines the effect of total asset turnover, current ratio, and intellectual capital on financial performance, and does not consider other factors that may affect financial performance. Additionally, the study only examines telecommunications sub-sector companies listed on the IDX, and does not consider other companies in the telecommunications industry.

Q: What are the future research directions?

A: The future research directions are to examine the effect of other factors on financial performance, such as market share, customer satisfaction, and employee engagement. Additionally, future studies can examine the effect of total asset turnover, current ratio, and intellectual capital on financial performance in other industries, such as manufacturing, retail, and healthcare.

Q: What are the practical implications of this study?

A: The practical implications of this study are that telecommunications companies can use the findings of this study to improve their financial performance and achieve long-term success. By focusing on increasing asset efficiency, maintaining good liquidity, developing human resources, and evaluating intangible assets, telecommunications companies can improve their financial performance and stay competitive in the market.

Q: What are the theoretical implications of this study?

A: The theoretical implications of this study are that it contributes to the existing body of knowledge on financial performance and its determinants. The study provides a comprehensive analysis of the factors that affect financial performance in telecommunications sub-sector companies, and provides a framework for future research on this topic.

Q: What are the policy implications of this study?

A: The policy implications of this study are that it provides a framework for policymakers to develop policies that support the growth and development of telecommunications companies. By understanding the factors that affect financial performance in telecommunications sub-sector companies, policymakers can develop policies that promote the growth and development of these companies.

Q: What are the future research directions in terms of methodology?

A: The future research directions in terms of methodology are to use more advanced statistical techniques, such as machine learning and artificial intelligence, to analyze the data and identify the factors that affect financial performance. Additionally, future studies can use more comprehensive data sets, such as data from multiple countries and industries, to examine the effect of total asset turnover, current ratio, and intellectual capital on financial performance.

Q: What are the future research directions in terms of scope?

A: The future research directions in terms of scope are to examine the effect of total asset turnover, current ratio, and intellectual capital on financial performance in other industries, such as manufacturing, retail, and healthcare. Additionally, future studies can examine the effect of these factors on financial performance in other countries and regions.

Q: What are the future research directions in terms of time period?

A: The future research directions in terms of time period are to examine the effect of total asset turnover, current ratio, and intellectual capital on financial performance in other time periods, such as the 2020-2025 period. Additionally, future studies can examine the effect of these factors on financial performance in other time periods, such as the 2015-2020 period.