THE EFFECT OF TOTAL ASSET TURNOVER, LEVERAGE AND INDEPENDENT COMMISSIONERS ON FINANCIAL PERFORMANCE

Abstract

This paper explores how total asset turnover (TATO), leverage, and the proportion of independent commissioners influence the financial performance of consumer cyclical firms, particularly those in the apparel & luxury goods and retailing subsectors listed on the Indonesia Stock Exchange (IDX) between 2019 and 2023. A quantitative approach was applied using multiple linear regression with 182 firm-year observations obtained through purposive sampling. The findings indicate that TATO significantly improves profitability, while leverage and independent commissioners do not exhibit a direct effect. Regarding control variables, firm size positively affects financial performance, firm age shows a negative influence, and sales growth does not produce a significant impact. The results highlight that operational efficiency and firm characteristics are key determinants of profitability, while governance mechanisms and capital structure may not directly drive returns in this sector.

Keywords: total asset turnover, leverage, independent commissioners, financial performance