Does Size Really Matter? Asset Turnover, Capital Structure, and the Performance of ASEAN Retail Companies

Abstract

This reasearch assesses the extent to which Asset Turnover and Debt to Equity Ratio affects on the company's financial performance (ROA) through company size as a moderation variable. This study uses a quantitative approach with the formulation of associative problems. The population in this study includes all retail companies in Southeast Asia contained in the OSIRIS financial database for the 2024 period, with data collection techniques in the form of documentation obtained from the OSIRIS financial database. The analysis method used was moderation regression analysis. The results of the study show that Asset Turnover has a significant positive effect on Return on Asset, in contrast to Debt to Equity Ratio which has no effect on Return on Asset. Furthermore, firm size cannot moderate between Asset Turnover and Return on Asset, this is the same as the result between Debt to Equity Ratio and Return on Asset which shows that firm size cannot moderate between the two variables. These findings show that asset efficiency is an important factor in increasing the profitability of the retail sector, while capital structure and company scale are not the main guarantees of the financial performance of the retail sector in ASEAN. The implication of this study is that retail sector management should prioritize optimizing asset turnover rather than focusing too much on debt and equity composition.