The Effects of Firm Size, Leverage, and Accounts Receivable Turnover on Profitability: The Moderating Role of Institutional Ownership in Indonesian Consumer Non-Cyclical Companies
Article Sidebar
Abstract Views: 89
File Views: 87
Main Article Content
Abstract
Profitability in the consumer non-cyclicals sector is an important indicator of firms’ operational sustainability and financial performance. This study examines the effects of firm size, leverage, and accounts receivable turnover on profitability, as well as the moderating role of institutional ownership. The study employed a quantitative explanatory design using 240 firm-year observations from consumer non-cyclicals companies listed on the Indonesia Stock Exchange during the 2023–2025 period. The sample was selected through purposive sampling, and the data were analyzed using Moderated Regression Analysis (MRA). The findings show that firm size and institutional ownership have significant positive effects on Return on Assets (ROA). In contrast, leverage and accounts receivable turnover have significant negative effects on ROA. The interaction results indicate that institutional ownership significantly strengthens the positive effect of firm size on profitability and mitigates the negative effects of leverage and accounts receivable turnover on profitability. These findings suggest that institutional ownership plays an important monitoring role in improving financial decision-making and working capital efficiency. This study contributes to the corporate governance literature by providing empirical evidence on the role of institutional ownership in shaping the relationship between financial characteristics and profitability in Indonesian consumer non-cyclicals companies.
Article Details
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
References
Akbar, S. (2026). Beyond Good Intentions: Peer E&S Incidents and the Unraveling of CSR Value. Journal of Business Ethics, 205(3), 613–639. https://doi.org/10.1007/s10551-025-06161-z
Belcaid, K. (2024). Determinants of Bank Profitability in the Context of Financial Liberalization: Evidence from Morocco. Business Perspectives and Research, 12(1), 164–180. https://doi.org/10.1177/22785337221148872
Chen, S. (2023). Does common ownership constrain managerial rent extraction? Evidence from insider trading profitability. Journal of Corporate Finance, 80(Query date: 2026-06-25 23:36:44). https://doi.org/10.1016/j.jcorpfin.2023.102389
Dai, J. (2024). Common institutional ownership and opportunistic insider selling: Evidence from China. Pacific Basin Finance Journal, 88(Query date: 2026-06-25 23:36:44). https://doi.org/10.1016/j.pacfin.2024.102580
Estrin, S. (2024). Does it matter who owns firms? Evidence on the impact of supermajority control on private firms in Europe. International Review of Financial Analysis, 95(Query date: 2026-06-25 23:36:44). https://doi.org/10.1016/j.irfa.2024.103427
Fauver, L. (2024). Boardroom gender diversity reforms and institutional monitoring: Global evidence. Review of Accounting Studies, 29(1), 621–664. https://doi.org/10.1007/s11142-022-09710-3
Gang, H. (2025). Common institutional investors and board representation in rival firms. Journal of Corporate Finance, 94(Query date: 2026-06-25 23:36:44). https://doi.org/10.1016/j.jcorpfin.2025.102836
Gulo, USA (2025). Effect of Profitability, Good Corporate Governance (GCG), Board Gender Diversity on Carbon Emission Disclosure (CED). Iop Conference Series Earth and Environmental Science, 1488(1). https://doi.org/10.1088/1755-1315/1488/1/012058
Gurusamy, P. (2024). Corporate Ownership Structure and Its Effect on Capital Structure: Evidence from BSE Listed Manufacturing Companies in India. Iim Kozhikode Society and Management Review, 13(2), 135–153. https://doi.org/10.1177/2277975220968305
He, Y. (2024). CORPORATE GOVERNANCE THEORY AND DETERMINANTS OF EFFECTIVE CORPORATE TAX RATES: A REVIEW BASED ON INTERNATIONAL LITERATURE. Corporate Law and Governance Review, 6(4), 117–129. https://doi.org/10.22495/clgrv6i4p11
Hou, S. (2026). Brand equity and corporate social irresponsibility: Evidence from an emerging market. Journal of Brand Management, (Query date: 2026-06-25 23:36:44). https://doi.org/10.1057/s41262-026-00430-6
Jeet, D. (2025). Determinants of Growth and Sustainable Development of Indian Firms. Journal of Applied Economic Sciences, 20(2), 207–219. https://doi.org/10.57017/jaes.v20.2(88).03
Joo, Y. (2025). CEO career horizon and innovation: A u-shaped tale of short-term profits and long-term legacy. Research Policy, 54(5). https://doi.org/10.1016/j.respol.2025.105216
Juwita, A. (2023). Audit Quality, Institutional Ownership, Profitability and XBRL on Financial Restatement. ACM International Conference Proceedings Series, (Query date: 2026-06-25 23:36:44), 435–439. https://doi.org/10.1145/3616712.3616794
Kanoujiya, J. (2023). Does promoters' ownership reduce the firm's financial distress? Evidence from non-financial firms listed in India. Managerial Finance, 49(4), 643–660. https://doi.org/10.1108/MF-05-2022-0220
Khan, H. H. (2023). Banking sector competition and firms' financial constraints: Firm-Level evidence from developing economies. Journal of International Financial Markets Institutions and Money, 88(Query date: 2026-06-25 23:36:44). https://doi.org/10.1016/j.intfin.2023.101848
Khan, M.A. (2023). Combating tax aggressiveness: Evidence from Indonesia's tax amnesty program. Cogent Economics and Finance, 11(2). https://doi.org/10.1080/23322039.2023.2229177
Kurniasari, F. (2025). Does corporate governance matter in elucidating factors that drive profitability in the insurance industry. Insurance Markets and Companies, 16(1), 90–102. https://doi.org/10.21511/ins.16(1).2025.08
Li, S. (2025). Do institutional investors prefer supply chain transparency? Economics Letters, 248(Query date: 2026-06-25 23:36:44). https://doi.org/10.1016/j.econlet.2025.112246
Martins, A. M. (2025). Banks stock market reaction to the Italian and Spanish windfall tax announcement: An event study. Journal of Banking Regulation, 26(1), 54–61. https://doi.org/10.1057/s41261-024-00246-x
Peddi, D. (2025). Can Institutional Interventions be Profitable for Millet Farming in India's Rainfed Regions? Insights from MESR Models. Journal of Quantitative Economics, 23(1), 211–232. https://doi.org/10.1007/s40953-024-00419-5
Perdana, MR (2023). Does Sustainable Finance Work on Banking Sector in ASEAN?: The Effect of Sustainable Finance and Capital on Firm Value with Institutional Ownership as a Moderating Variable. Journal of Risk and Financial Management, 16(10). https://doi.org/10.3390/jrfm16100449
Rakshit, B. (2023). Assessing the effects of cost, revenue and profit efficiency on bank performance: Empirical evidence from Indian banking. International Journal of Organizational Analysis, 31(5), 1867–1898. https://doi.org/10.1108/IJOA-06-2021-2802
Ricca, B. (2026). CEO equity-linked compensation and environmental scores by MCDA. Management Decision, (Query date: 2026-06-25 23:36:44), 1–20. https://doi.org/10.1108/MD-07-2025-1882
Shah, S. F. (2024). Earnings management opportunistic or efficient in Pakistan? The role of corporate governance practices. Cogent Business and Management, 11(1). https://doi.org/10.1080/23311975.2024.2398716
Shapovalova, S. (2023). Determinants of Dividend Payments of Russian Companies. Journal of Corporate Finance Research, 17(1), 54–63. https://doi.org/10.17323/j.jcfr.2073-0438.17.1.2023.54-63
Sheng, D. (2023). Corporate governance in Chinese manufacturing sector: Ownership structure, monitoring and firms' earning quality. National Accounting Review, 5(4), 421–443. https://doi.org/10.3934/NAR.2023024
Tia, USA (2024). Carbon Emissions Disclosure in Indonesia: The Impact of Institutional Ownership. Management of Sustainable Development, 16(1), 45–57. https://doi.org/10.54989/msd-2024-0005
Wahyuningrum, IFS (2024). Determinants of carbon emission disclosure and the moderating role of environmental performance. Cogent Business and Management, 11(1). https://doi.org/10.1080/23311975.2023.2300518
Wang, P. (2026). Configurations for High-Quality Environmental Disclosure in China's Dual Carbon Era. American Journal of Economics and Sociology, 85(1), 49–62. https://doi.org/10.1111/ajes.70001
Yanto, H. (2024). Disclosures in integrated reporting in Indonesia: Do corporate governance and ownership structures matter? International Journal of Management and Sustainability, 13(4), 949–962. https://doi.org/10.18488/11.v13i4.3958
Yendrawati, R. (2023). Effects of Corporate Governance and Financial Performance on Fraudulent Financial Statements: Evidence from Indonesia's Property, Real Estate, and Building Construction Sectors. Management and Accounting Review, 22(1), 1–25.