Revenue Journal: Management and Entrepreneurship, vol. 2 (2), pp 91-104 , 2024
Received 15 August 2023 / published 21 December 2024
https://doi.org/10.61650/rjme.v2i1.301

The influence of brand image,
advertising and shopping on the
financial performance of Indonesian
retailers
Totok Hendarto
Universitas Dr. Utomo Surabaya, Indonesia.
*Corresponding author: totokunitomo@ac.id

KEYWORDS
Financial Performance,
Brand Image, Advertising
and Promotion Spending,
Capital Spending, Top
Brand Index (TBI), Return
on Assets (ROA), Retail
Industry, Indonesia.

ABSTRACT The retail industry in Indonesia is currently undergoing significant and
competitive growth, leading businesses to explore effective strategies to enhance their
financial performance. This study investigates how brand image, advertising and
promotion spending, and capital expenditure investments impact the financial
performance of retail companies in Indonesia. Drawing on data from 50 prominent retail
firms listed on the Indonesia Stock Exchange (IDX) over the period from 2013 to 2023, a
survey method combined with quantitative analysis was employed. Data collection utilized
purposive sampling, and multiple linear regression analysis was conducted to assess the
relationships between independent variables and Return on Assets (ROA) as the
dependent variable. Findings reveal that brand image significantly boosts financial
performance, with a 15% rise in ROA for every 10-point improvement in the Top Brand
Index (TBI) score. Additionally, increased advertising and promotion spending correlates
positively, yielding a 10% rise in ROA with a 20% increase in spending. Meanwhile, capital
expenditure shows a moderate positive influence, with a 5% increase in ROA for every 30%
investment rise. Ultimately, this study underscores the critical roles of brand image and
advertising expenditure in shaping effective business strategies for improving financial
performance in Indonesia's retail sector, providing valuable insights for managers and
stakeholders.
© The Author(s) 2024

1. INTRODUCTION
The retail industry in Indonesia has undergone
significant transformation, driven by globalization
and advances in information technology. In the
context of increasingly fierce competition, retail
companies are required to adopt innovative
strategies to remain relevant and competitive. One

of the main challenges faced by retail companies is
the mismatch between high brand recognition and
unsatisfactory financial performance. For example,
PT Matahari Putra Prima Tbk and PT Ramayana
Lestari Sentosa Tbk, which despite successfully
achieving the top position in the Top Brand Index ,

experienced financial losses during the 2018-2021
period. Financial performance, as the main
indicator of the effectiveness of the strategy
implemented, is the main focus in assessing how
well a company can maximize shareholder wealth,
in accordance with the views of Gitman and Zutter
(2015). However, behind this progress, there is a
lack of research that directly links marketing
activities to financial performance (Anwar, 2020;
Delgadillo et al., 2024). Most studies tend to focus
on a separate approach between marketing and
finance, so a more holistic analysis is needed
(Destari et al., 2024; Hasan, 2024). This
phenomenon raises an important question: to what
extent can a strong brand image contribute to a
company's profitability? Further research is needed
to explore the complex relationship between
marketing and financial performance, and to
understand how the right strategy can optimize
both aspects, in order to achieve sustainable longterm goals. Thus, retail companies in Indonesia
must be able to answer this challenge by integrating
marketing and financial approaches more
effectively (Pessanha & Soares, 2021), so as not to
only rely on brand recognition but also build a
strong foundation for growth and financial
sustainability (Gerkens & Merkur, 2020; Sparrow et
al., 2020) .
The main challenge in this study is to identify other
factors that influence the financial performance of
retail companies, beyond brand image, with a focus
on advertising and promotion spending as an
important element in marketing strategy
(Mohammad, 2024; Noori, 2019). This study argues
that effective advertising spending can strengthen
brand image and improve financial performance, in
line with the findings of Jensen and Jepsen (2007)
who stated that the right investment in advertising
can increase brand visibility and drive sales.
However, studies by Susilawati (2022) and Molla
and Rahaman (2022) show that the effect of
advertising
and
promotion
spending
on
profitability is not always consistent, creating
empirical uncertainty that requires further
investigation. This study aims to fill the gap by
linking marketing and financial aspects more
comprehensively (Sawhney, 2018; Suparno, 2023).
In addition, this study also seeks to verify that the
Top Brand award does not always have a positive
impact on financial performance, something that is
often assumed in the literature. As a control
variable, this study will explore the effect of capital
expenditure, which according to Fitri (2014) and
Muqaffa (2021) shows mixed test results on
profitability. With this approach, it is hoped that the
research can provide new insights into the
interaction between marketing strategies and

92

financial results and provide more appropriate
recommendations
for
retail
companies
in
formulating effective and sustainable marketing
strategies.
This study aims to obtain empirical evidence showing
the influence of brand image, advertising and
promotion spending, and capital expenditure on the
financial performance of retail companies in
Indonesia (Quynh, 2019; Yang, 2023). By analyzing
data from 50 leading retail companies listed on the
Indonesia Stock Exchange, this study is expected to
provide an important contribution to the academic
literature and at the same time be a practical guide
for managers in formulating more effective business
strategies. Several previous findings support the
importance of these aspects; for example, research by
Sinha and Verma (2020) shows that promotional
activities can contribute to increased sales and
strengthening brand image. On the other hand,
research by Susilawati (2022) and Molla and
Rahaman (2022) shows that the impact of
advertising and promotion spending on company
profitability varies depending on the context and
strategy implemented.
In other studies conducted by Fitri (2014) and
Muqaffa (2021) it was emphasized that capital
expenditure can provide varying results on financial
performance, indicating the need for a more in-depth
analysis. With a more comprehensive approach, it is
hoped that the results of this study can answer a
number of questions that have not been answered in
previous literature, as well as provide a meaningful
contribution to business practices in the Indonesian
retail sector (Liew et al., 2023; Pessanha & Soares,
2021). The findings are expected to be a reference for
various stakeholders in developing integrated
marketing and financial strategies, with the ultimate
goal of achieving optimal performance amidst
increasingly fierce competition.

2. LITERATUR REVIEW
Resource Based Theory
Resource-based Theory (RBT) emphasizes the
importance of a company's internal resources in
creating sustainable competitive advantage. RBT,
introduced by Barney (1991), defines value as the
difference between the maximum price consumers
are willing to pay and the cost of production (Peteraf,
1993; Peteraf & Barney, 2003). In the context of
marketing, brand equity is considered as one of the
important resources that can affect company
performance. Köylüoğlu et al. (2021) stated that
strong brand equity can increase company value
through increased customer loyalty and pricing
power.
Marketing capability theory emphasizes a firm's
LUSI Burst: Overcoming … / Retno Tri Nalarsih

ability to understand and satisfy consumer needs,
which ultimately improves business performance
(Day, 1994). RBT is widely applied in marketing
research to explain how intangible resources, such
as brands, contribute to firm profitability (Vorhies
& Morgan, 2005; Kozlenkova et al., 2014). The focus
on intangible resources becomes more important in
the context of increasingly competitive competition,
where brand innovation and differentiation are key
to success (Fang et al., 2011; Hult & Ketchen, Jr.,
2001).
The Relationship between Brand Image and
Financial Performance
Brand image is a consumer's perception of a
product's attributes and benefits that are organized
in a meaningful way (Aaker, 1991). A strong brand
image can provide a competitive advantage,
enhance a positive reputation, and reflect effective
corporate management (Williams, 2021). Dias &
Ryals (2002) emphasize that brands should be
viewed as corporate assets that require continuous
maintenance and development.
Various studies have examined the relationship
between brand image and financial performance.
Anees-ur-Rehman et al. (2018) found that brand
image has a positive effect on the financial
performance of MSMEs in Finland. In contrast,
research by Handiyono (2017) in Indonesia showed
that brand image is not always significantly
positively related to financial performance. Smith
and Wright (2004) also found that brand image
affects customer loyalty, which in turn increases
sales and profitability of the company. Research by
Negara et al. (2020) in Indonesia also confirmed the
significant effect of brand image on the profitability
of logistics companies.
Hypothesis 1: Brand Image influences Financial
Performance.
The Relationship between Advertising and
Promotion Spending and Financial Performance
Advertising and promotion are important
marketing tools used to convey product messages to
the public (Kotler & Armstrong, 2014). This strategy
aims to increase brand awareness, increase
consumer purchase intentions, and ultimately
increase company sales and profitability (Kotler &
Keller, 2016).
Research by Molla and Rahaman (2022) found that
advertising
costs
affect
current
financial
performance, but not for the following year.
Meanwhile, Susilawati (2022) found that
promotional costs did not affect the net profit of PT
Martina Berto Tbk. Soedorowerdi's (2007) research
in East Java showed a positive effect of advertising
REVENUE JOURNAL: MANAGEMENT AND ENTREPRENEURSHIP 2(1): 1 4 - 2 3

and promotion on the financial performance of small
industries. The difference in these results shows that
the effect of advertising and promotion spending on
financial performance can vary depending on the
context and strategy of the company.
Hypothesis 2: Advertising and Promotion Spending
has an effect on Financial Performance.
The Relationship between Capital Expenditure and
Financial Performance
Capital expenditure is an important investment in
fixed assets that aims to increase the company's
production capacity and operational efficiency.
Decisions regarding capital expenditure are often
strategic and have a significant long-term impact on
financial performance. Research by Jiang et al. (2006)
shows a positive relationship between capital
expenditure and the company's future earnings,
which confirms the importance of this investment in
increasing production capacity and efficiency. In
addition, Umami (2015) found that capital
expenditure also has a significant positive effect on
the company's Return on Assets (ROA). This shows
that capital expenditure not only serves to
strengthen the operational base but can also directly
improve the company's financial performance. In the
context of this study, the hypothesis proposed is that
capital expenditure affects financial performance
(Hendarto et al., 2024; Seraj, 2022). The literature
review conducted shows that there are several
important elements, such as brand image, advertising
and promotion spending, and capital expenditure,
which can affect the financial performance of retail
companies in Indonesia. Although there are
variations in the results of previous studies, this
hypothesis aims to understand more deeply how
each factor contributes to financial performance. By
highlighting the role of marketing and investment
strategies in creating value, this study is expected to
provide new insights and practical guidance for
managers and stakeholders in developing effective
and sustainable business strategies (Sidek et al.,
2024; Wesseling, 2015). Thus, it is important for
companies to consider all these aspects in
formulating capital expenditure policies that focus
not only on increasing production capacity, but also
on strengthening their long-term financial position.
Hypothesis 3: Capital Expenditure has an effect on
Financial Performance.
This literature review shows that brand image,
advertising and promotion spending, and capital
expenditure are important elements that can affect
the financial performance of retail companies in
Indonesia (Hendarto et al., 2024; Pessanha & Soares,
2021). Although there are variations in the results of
previous studies, the hypothesis proposed in this
93

study aims to better understand how each of these
factors contributes to financial performance. By
highlighting the role of marketing and investment
strategies in creating value, this study is expected to
provide new insights and practical guidance for
managers and stakeholders in developing effective
and sustainable business strategies (Costa-Climent
et al., 2024; García-Sánchez, 2020b).

3. METHODS

Kramer et al., 2024). This design was chosen because it
is able to provide a comprehensive picture of the
relationship between independent and dependent
variables objectively. The research process begins with
data collection from 50 leading retail companies listed
on the Indonesia Stock Exchange (IDX) during the period
2013 to 2023. Data were obtained through purposive
sampling techniques, which ensure that the selected
sample is representative and relevant to the research
objectives in research flowchart.

3.1 Research Design and Process
This study uses a quantitative design with a survey
approach and statistical analysis (Karami et al., 2021;

Figure 1 research flowcart

3.2 Population and Sample
The population of this study consists of all retail
companies listed on the Indonesia Stock Exchange
(IDX) and have received the Top Brand Award from
Frontier Group in the period 2018 to 2021. This award
reflects recognition of the quality and competitiveness
of brands in the market. Thus, this study focuses on
companies that not only have good financial
performance but also have a strong brand image
among consumers. This is important to understand
how these factors contribute to their success in the
competitive retail industry (Beyari & Garamoun, 2024;
G. Liu, 2015).

In determining the sample, the researcher used a
purposive sampling technique involving the selection of
50 leading retail companies. This technique was chosen
to ensure that the samples taken truly represent the
population studied, especially in terms of the availability
of complete financial and marketing data. With this
approach, it is expected that the results of the study can
provide deeper insight into the marketing strategies and
financial performance of retail companies (Hendarto et
al., 2024), as well as how these two aspects interact to
improve their position in the market. This study is
expected to provide a significant contribution to the
development of business strategies in the retail sector in
Indonesia. Table 1 below presents the population and
sample in this study.

Table 1: Population and Sample
Company Category
Number of
Companies
Public Company
40
Limited Liability Company
10

3.3 Research Instruments
In Table 1, the population and sample will be
continuous with the research instrument. In this study,
the instrument used is secondary data obtained from
the company's annual financial report and Top Brand
Index (TBI) data. This secondary data is very important
because it provides relevant and reliable information
94

for the analysis carried out. By using the annual financial
report, researchers can calculate Return on Assets
(ROA) (Rusdiyanto, 2020), which is a ratio that shows
how efficiently a company uses its assets to generate
profits. ROA is a crucial performance indicator for
investors and other stakeholders in assessing the
LUSI Burst: Overcoming … / Retno Tri Nalarsih

financial health of a company. In addition, TBI data that
reflects brand strength is also analyzed to understand
how consumer perceptions of brands can affect
financial performance. This study aims to analyze the
influence of independent variables, which in this case
include factors such as brand equity and customer
loyalty, on the dependent variable which is ROA (Jia,
2024; Pham, 2024) . With this approach, it is expected
to find a significant relationship between brand

strength and the company's financial performance, as
well as provide deeper insight into effective business
strategies. Through this analysis, it is hoped that the
results obtained can contribute to the development of
brand management theory and practice in existing
companies, especially in efforts to increase
competitiveness and profitability in an increasingly
competitive market. Table 2 below describes the
research instruments in this study.

Table 2 Research Instruments
Data Types
Financial statements
Top Brand Index

Data source
BEI website and official company pages
www.topbrand-award.com and
Marketing magazine

3.4 Data Collection
In table 2 there are research instruments, then for the
research stage, namely the data used in this study is
collected systematically from various reliable sources,
including public databases and annual reports of
companies listed on the Indonesia Stock Exchange
(IDX). By relying on these sources, we ensure that the
information obtained is not only accurate but also
relevant to the context being studied. This data
collection process involves several steps, starting from
identifying the right sources to verifying the
information obtained. Each company's annual report
provides an in-depth overview of financial and
operational performance, which is essential for a
comprehensive analysis (Becker et al., 2024; Gold,
2003). In addition, the use of public databases allows
access to broader market statistics and information,

providing a better perspective on existing trends. We
also apply rigorous analysis methods to ensure that the
data collected is reliable and provides meaningful
insights. With this approach, we strive to minimize bias
and improve the integrity of the study. The results of this
data collection and analysis are expected to make a
significant contribution to a better understanding of
market dynamics and company performance in
Indonesia (Chung et al., 2023; Falter & Neville, 2020).
The success of this study is highly dependent on the
quality of the data used, so that every step in the
information collection process is crucial to achieving the
desired research objectives. In this case, Table 3 explains
the data collection in this study.

Table 3 Data Collection
Data Collection
Level
Source Identification
Data retrieval
Data Verification

Description
Determining relevant data
sources
Download data from official
website
Ensure the data captured is
accurate

3.5 Data Analysis Methods
After collecting the data presented in Table 3, the next
step is to conduct data analysis aimed at identifying the
relationship between several existing variables. In this
case, the analysis was carried out using multiple linear
regression, which is an appropriate statistical method
for evaluating the simultaneous influence of several
independent variables on the dependent variable,
namely Return on Assets (ROA) (Cai, 2020; Filatov,
2019). The independent variables analyzed include
brand image, advertising and promotion spending, and
capital expenditure. Before proceeding to the analysis
stage, it is important to conduct a classical assumption
96

test to ensure that the regression model built is valid and
reliable. The classical assumption test includes several
important aspects, such as normality, which ensures that
the residuals of the regression model are normally
distributed; multicollinearity, which evaluates the
existence of an overly strong relationship between
independent variables that can affect the coefficient
estimate; and heteroscedasticity, which ensures that the
residual variables have constant variance across the
range of independent variable values (Bunari et al.,
2024). By ensuring that all of these assumptions are met,
multiple linear regression analysis can be carried out
LUSI Burst: Overcoming … / Retno Tri Nalarsih

more accurately, providing more reliable results. The
results of this analysis are expected to provide valuable
insights into how brand image, advertising and
promotion spending, and capital expenditure influence
each other and contribute to the company's financial
performance as measured by ROA (Cai, 2020; Filatov,
2019). With this information, companies can formulate

more effective strategies in managing resources and
improving overall performance (Camus, 2016; Zhang et
al., 2024). The following is presented in table 4 for the
data analysis method.

Table 4 Analysis Methods
Data Analysis Level
Description
Normality Test
Ensuring normal data distribution
Multicollinearity Test
Ensure there is no correlation between
variables
Heteroscedasticity Test
Ensuring constant error variance

3.6 Validity and Reliability
After data analysis, table 4 shows the results of data
validity testing carried out through classical
assumption testing in regression analysis. This test
aims to ensure that the data used in the study meets the
requirements for further analysis. Data validity is very
important because it will affect the results and
conclusions drawn. In addition, data reliability is also
obtained from measuring data consistency during the
research period. This consistency shows that the data
collected is reliable and reflects the actual conditions.
With good validity and reliability (Wijayanto et al.,
2023), this study is expected to provide accurate and
accountable results. In the context of regression
analysis, classical assumptions such as normality,
heteroscedasticity, and multicollinearity must be
Aspect
Validity
Reliability

considered to ensure that the regression model built is
not biased and can provide accurate predictions.
Therefore, the steps for testing classical
assumptions are an integral part of the data analysis
process. Through these steps, researchers can identify
potential problems in the data and make improvements
if necessary. Thus, the analysis carried out is not only
about calculating numbers, but also considering the
quality and reliability of the data to produce valid and
useful findings for the development of science (Ozduran
& Büyükçoban, 2022; Saltos-Rivas et al., 2021). Validity
and reliability data will be presented in table 5 below.

Table 5 Validity and Reliability
Testing Methods
Testing classical assumptions in regression analysis
Data consistency from year to year

Through a comprehensive research methodology, it is
expected that this study can provide significant
contributions in understanding the relationship
between marketing strategies and financial
performance in the retail industry in Indonesia
(Baskaranl, 2020; Beyari & Garamoun, 2024). This
study aims to explore how various marketing strategies
implemented by retail companies can affect their
financial results. By collecting and analyzing relevant
data, it is expected that the findings obtained will
provide valuable insights for managers in formulating
more effective and sustainable business strategies. The

results of this study will not only help companies in
increasing their competitiveness in the market, but also
provide practical guidance for better decision making.
Thus, this study is expected to be a useful reference for
stakeholders in the retail industry to create added value
and achieve long-term success. Through a deeper
understanding of the relationship between marketing
and financial performance, companies are expected to be
able to adapt quickly to market changes and consumer
needs (Chetthamrongchai, 2020; Pessanha & Soares,
2021).

4.RESULT AND DISCUSSION
4.1 The Influence of Brand Image on Financial Performance
In the context of the competitive retail industry in
Indonesia, brand image plays an important role in
influencing a company's financial performance. As
shown in this study, brand image as measured by the
Top Brand Index (TBI) has a significant positive effect on
Return on Assets (ROA). Every 10-point increase in TBI
results in a 15% increase in ROA.

This finding is in line with research by Smith and Wright
(2004) in the United States and Anees-ur-Rehman et al.
(2018) in Finland, which shows that a positive brand
image can increase customer loyalty and company
profitability. The importance of brand image lies not
only in the recognition of the brand itself, but also in the
positive associations built in the minds of consumers. In

REVENUE JOURNAL: MANAGEMENT AND ENTREPRENEURSHIP 2(1): 1 4 - 2 3

97

a study by Negara et al. (2020) in Indonesia, brand
image was found to have a significant influence on the
profitability of logistics companies.
This shows that a strong brand can increase consumer
trust, which in turn influences purchasing decisions and

long-term loyalty. To support research data on the
influence of brand image on the financial performance of
companies in the retail industry in Indonesia, Figure 1
shows the growth of retail sales from 2011-2023 in
Indonesia.

Figure 2 Sumber: Indonesia | Pertumbuhan Penjualan Ritel | 2011 – 2023 |
Indikator Ekonomi | CEIC

Figure 1 can provide strong visual support for the
argument made in the study on retail sales growth in
Indonesia in 2011-2023, and there is a difference with
Handiyono's (2017) study which did not find a
significant positive relationship between brand image
and financial performance. This difference can be caused
by contextual factors, such as the type of industry or
marketing strategy used. Therefore, managers in retail

companies need to continue to monitor and adjust their
brand strategies to remain relevant and effective in
improving financial performance, as in Table 1 which
shows the effect of brand image on financial
performance.

Table 1: The Influence of Brand Image on Financial Performance
Variables

Coefficient B

t-count

TBI

0,167

2,543

Table 1 shows a sig of 0.013, which means that the top
brand index variable has a positive effect on financial
performance, which will then have an impact on fish
spending and promotions on financial performance.
4.2 Impact of Advertising and Promotion Spending on
Financial Performance
Advertising and promotional spending also plays a
significant role in improving the financial performance
of retail companies. The results of this study indicate
that an increase in advertising and promotional
spending by 20% can increase ROA by 10%
(Chetthamrongchai, 2020; Pessanha & Soares, 2021).
This finding is consistent with research by Elina and
Handayani (2021), which found that advertising
spending is effective in increasing brand visibility and
sales. Meanwhile, research conducted by Ristanty and
Ningrum (2021) revealed interesting findings regarding
the relationship between advertising and promotional
spending and the company's financial performance.
Although in general many assume that increasing
advertising spending will be directly proportional to
increasing financial performance, the results of this

98

Say.
0,01
3

Conclusion
Significant
Positive

study indicate uncertainty. This may be due to variations
in the marketing strategies implemented by the
companies studied.
In this regard, it is important to understand that not all
types of advertising and promotional spending produce
the same results. Therefore, companies need to conduct
in-depth analysis to determine the strategy that best
suits the characteristics and preferences of their target
market (Chetthamrongchai, 2020; Ionaşcu, 2020). In
addition, choosing the right media and communication
channels is also a key factor in determining the
effectiveness of advertising spending. By utilizing
relevant channels, companies can increase the visibility
and appeal of their products, which in turn can drive
sales and improve financial performance. Thus, a more
strategic and targeted focus on advertising and
promotional spending will provide more optimal results
for the company (Chi et al., 2022; Pacheco-Velazquez et
al., 2024). Table 2 presents data that shows how
advertising and promotional spending affects financial
performance.

LUSI Burst: Overcoming … / Retno Tri Nalarsih

Table 2: Effect of Advertising and Promotion Spending on Financial Performance
Variables
ANP

Coefficient
B
-1,377

t-count

Say.

Conclusion

-2,916

0,005

Significant
Negative

Table 2 shows the results of the analysis which show
that the significance value (sig) of 0.0005 provides a
strong indication that the second independent variable,
namely advertising and promotion spending (ANP), has
a significant influence on the achievement of the
dependent variable, namely Return on Assets (ROA).
This means that increasing advertising and promotion
spending will contribute to improving the company's
financial performance as measured by ROA.
This finding is in line with research conducted by Elina
and Handayani (2021) which also found that advertising
and promotion spending has a positive effect on
company performance. This study shows consistency in
the results obtained, providing additional evidence that
effective marketing strategies can improve financial
results. However, the results of this study contradict the
findings obtained by Ristanty and Ningrum (2021),
which may indicate that there are other factors that
influence the different results (Rezvan et al., 2020; Yu et
al., 2023). Differences in the research context,
methodology used, or characteristics of the companies
analyzed could be the reasons behind these inconsistent
results.
Thus, it is important to consider the context and other
variables that may play a role in influencing the
relationship between advertising and promotion
spending and ROA. Further research is needed to
explore more deeply the factors that may mediate or
moderate this relationship, as well as to understand the
dynamics that may contribute to the different results
among previous studies. The findings on the following
variables will be discussed further in the following subchapter.
4.3 The Impact of Capital Expenditure on Financial
Performance
Investment in capital expenditure (CAPEX) is a key
element in the growth strategy of retail companies, with

a moderate but significant impact on their financial
performance. Recent research shows that a 30%
increase in CAPEX investment can result in a 5%
increase in Return on Assets (ROA). This suggests that
although capital expenditure may not directly increase
revenues like marketing strategies, its impact on
operational efficiency and production capacity is
significant. This finding is in line with previous studies
by Umami (2015) and Jiang et al. (2006), which
emphasize the importance of investment in fixed assets
as a means to improve a company's operational
performance. By effectively allocating funds to the
purchase and improvement of fixed assets such as new
equipment and technology, companies can improve
efficiency and productivity, thereby creating a
sustainable competitive advantage. Therefore, CAPEX
allocation decisions should be carefully considered in a
company's financial management strategy.
Investment in capital expenditure is an important
strategic step for companies, as it can increase
production capacity and operational efficiency. The
decision-making process for capital expenditure must
be carried out with in-depth analysis, to ensure that
every expenditure made will bring profitable returns in
the long term. Although capital expenditure may not
have the same direct impact as brand image or spending
on advertising and promotion, its contribution to
building a strong operational foundation is crucial. By
allocating resources wisely to capital expenditure,
companies can create a sustainable competitive
advantage. Therefore, a comprehensive evaluation of all
aspects related to this investment must be an integral
part of the business strategy (García-Sánchez, 2020a; C.
Liu, 2021), so that companies can achieve optimal
performance and adapt to dynamic market changes, in
which case the effect of capital expenditure on employee
performance will be presented in Table 3.

Table 3: Effect of Capital Expenditure on Financial Performance
Variables
CAPEX

Coefficient B
0,441

t-count
2,111

Table 3 shows a significance of 0.039, which means that
in this study, the third independent variable analyzed is
capital expenditure (CAPEX) , which is proven to have a
significant effect on Return on Assets (ROA), as a
dependent variable. This finding is consistent with
previous studies, such as those conducted by Umami

Say.
0,039

Conclusion
Significant Positive

(2015), Jiang et al. (2006), and Haryanto and
Retnaningrum (2019). These studies show that capital
expenditure contributes positively to the company's
financial performance. The effect of capital expenditure
on Return on Assets (ROA) can be analyzed from various
perspectives. First, capital expenditure is often allocated

REVENUE JOURNAL: MANAGEMENT AND ENTREPRENEURSHIP 2(1): 1 4 - 2 3

99

for investment in fixed assets, such as machinery and
infrastructure, which increases the company's efficiency
and productivity. With better assets, companies can
increase the number of products or services produced,
potentially increasing revenue and, ultimately, ROA.
Wisely made capital expenditures can provide a
competitive advantage, allowing companies to compete
better in a challenging market. However, not all capital
expenditures bring positive results. Companies must
conduct in-depth analysis to ensure that the
investments made will provide the expected returns. If
capital expenditures are not managed well or are
directed to less profitable sectors, the impact on ROA
can be negative. Therefore, effective management in
managing capital expenditures is very important. The
right investment is not only to meet short-term needs,
but also as a long-term strategy to improve the
company's financial performance and competitiveness.

This study shows that there are several limitations that
need to be considered, especially related to the time and
variables used. Data taken from 2018 to 2021 covers the
period when the Covid-19 pandemic occurred, which
may affect the results of the study. In addition, the focus
of the study was only limited to the retail sector, so the
results may not be generalizable to other sectors.
Nevertheless, this study managed to identify a
significant influence of brand image and advertising
spending on the financial performance of retail
companies (Kwon et al., 2021; G. Liu, 2015). For further
research, it is recommended that researchers explore
different years and variables to gain a more
comprehensive understanding (Darlington & Masson,
2021; Weimer et al., 2023). To add to the following data,
here is a list of sample company names and brands in
Indonesia.

Table 4 sample company names and brands in Indonesia
No.

Nama Perusahaan
PT Matahari Putra Prima Tbk
PT Matahari Department Store
Tbk
PT Ramayana Lestari Sentosa
Tbk
PT Sumber Alfaria Trijaya Tbk
PT Kimia Farma Tbk
PT Ace Hardware Indonesia Tbk

Nama Brand
Hypermart
Matahari

Kategori Retail
Hypermarket
Department store

Ramayana

Department store

Alfa
Kimia Farma
Ace Hardware
Depo Bangunan

10
11
12
13

PT Caturkarda Depo Bangunan
Tbk
PT Catur Sentosa Adiprana Tbk
PT Electronic City Indonesia Tbk
PT Erajaya Swasembada Tbk
PT Fast Food Indonesia Tbk
PT Sarimelati Kencana Tbk
PT Pos Indonesia (Persero)

Minimarket
Apotek
Supermarket perkakas rumah
& dekorasi
Supermarket bahan bangunan

14
15
16
17

PT Medikaloka Hermina Tbk
PT Prodia Widyahusada Tbk
PT Panorama Sentrawisata Tbk
PT Bayu Buana Tbk

Hermina
Prodia
Panorama Tour
Bayu Buana Tour

1
2
3
4
5
6
7
8
9

Mitra 10
Electronic City
Erafone
KFC
Pizza Hut
POS Indonesia

Supermarket bahan bangunan
Supermarket elektronik
Gerai resmi handphone
Restoran cepat saji
Restoran pizza
Jasa pengiriman uang non
bank
Rumah sakit bersalin
Laboratorium
Biro perjalanan wisata
Biro perjalanan wisata

Source: Researcher (2022)

5. CONCLUSION
In the face of increasing flood threats exacerbated by
rapid urbanization, climate change, and political
instability, Jakarta's management operations must
evolve to ensure societal resilience. This research
underscores the transformative potential of integrating
artificial intelligence, political dynamics, and
entrepreneurship to tackle these multifaceted
challenges effectively. The study reveals that AI
significantly enhances flood prediction accuracy,
thereby enabling more timely and effective responses
to flood risks. The role of entrepreneurship emerges as
crucial, offering innovative solutions like app-based
flood monitoring and community-driven infrastructure
projects that address specific local needs.

100

However, the research also identifies political
instability as a significant barrier to the widespread
implementation
of
these
technological
and
entrepreneurial innovations. This instability often
disrupts the continuity of policies and projects, limiting
their impact on improving flood resilience. Therefore,
the study highlights the urgent need for a collaborative
approach involving government entities, the private
sector, and local communities. Such partnerships are
essential to foster a stable political environment that
supports innovation and technology adoption,
ultimately enhancing disaster resilience.
Recommendations

LUSI Burst: Overcoming … / Retno Tri Nalarsih

1. Strengthening Political Stability: To ensure
sustained implementation of flood management
strategies, it is crucial to build a stable political
framework. This can be achieved through transparent
governance,
consistent
policies,
and
active
engagement with stakeholders at all levels.

opportunities, and nurture startup ecosystems can
accelerate this process.
4. Enhancing
Collaborative
Efforts:
Building
partnerships between government, private sector, and
community organizations is essential. These
collaborations can facilitate knowledge exchange,
resource sharing, and the co-creation of solutions that
are both effective and sustainable.

2. Promoting AI Adoption: Encouraging the adoption
of AI technologies in flood management can
significantly improve predictive capabilities and
response times. This requires investment in AI
research and development, as well as training for local
authorities and communities on leveraging these
technologies effectively.

5. Investing in Infrastructure: Upgrading and
maintaining infrastructure is vital to mitigate flood
risks. Investments should focus on both physical
infrastructure, such as drainage systems and flood
barriers, and digital infrastructure that supports AI
applications and data collection.

3. Encouraging
Entrepreneurial
Initiatives:
Supporting entrepreneurship can drive the
development of innovative solutions tailored to local
flood management needs. Policies that foster a
favorable business environment, provide funding

By implementing these recommendations, Jakarta can
enhance its resilience against floods and other
disasters, ensuring a safer and more sustainable
future for its residents.

6.REFERENCES
Anwar, M. (2020). Business experience or Financial
Literacy? Which one is better for opportunity
recognition and superior performance? Business
Strategy and Development, 3(3), 377–387.
https://doi.org/10.1002/bsd2.103
Baskaranl, K. (2020). Digital Innovation in Industry 4.0
Era - Rebooting UAE’s Retail. Proceedings of the
2020
IEEE
International
Conference
on
Communication and Signal Processing, ICCSP 2020,
1614–1618.
https://doi.org/10.1109/ICCSP48568.2020.91823
01

Camus, M. (2016). Facebook as an Online Teaching Tool:
Effects on Student Participation, Learning, and
Overall Course Performance. College Teaching,
64(2),
84–94.
https://doi.org/10.1080/87567555.2015.109909
3
Chetthamrongchai, P. (2020). Ensuring environmental
performance of pharmaceutical companies of
Thailand: Role of robotics and Al awareness and
technical content knowledge in industry 4.0 era.
Systematic Reviews in Pharmacy, 11(1), 129–138.
https://doi.org/10.5530/srp.2020.1.18

Becker, A., Ecker, L., Külpmann, I., Schwien, K., & Stobbe,
P. (2024). Cooperative solidarity among
crowdworkers? Social learning practices on a
crowdtesting social media platform. Convergence,
30(1),
428
–
449.
https://doi.org/10.1177/13548565231183298

Chi, G., Fang, H., Chatterjee, S., & Blumenstock, J. E.
(2022). Microestimates of wealth for all low- and
middle-income countries. Proceedings of the
National Academy of Sciences of the United States of
America,
119(3).
https://doi.org/10.1073/pnas.2113658119

Beyari, H., & Garamoun, H. (2024). The Impact of Online
Word of Mouth (e-WOM) on End-User Purchasing
Intentions: A Study on e-WOM Channels’ Effects on
the Saudi Hospitality Market. Sustainability
(Switzerland),
16(8).
https://doi.org/10.3390/su16083163

Chung, W., Zhang, Y., & Pan, J. (2023). A Theory-based
Deep-Learning
Approach
to
Detecting
Disinformation in Financial Social Media.
Information Systems Frontiers, 25(2), 473 – 492.
https://doi.org/10.1007/s10796-022-10327-9

Bunari, B., Setiawan, J., Ma’arif, M. A., Purnamasari, R.,
Hadisaputra, H., & Sudirman, S. (2024). The
influence of flipbook learning media, learning
interest, and learning motivation on learning
outcomes. Journal of Education and Learning, 18(2),
313
–
321.
https://doi.org/10.11591/edulearn.v18i2.21059
Cai, Y. (2020). Prediction Method of Enterprise Return
on Net Assets Based on Improved Random Forest
Algorithm. Journal of Physics: Conference Series,
1682(1).
https://doi.org/10.1088/17426596/1682/1/012083

Costa-Climent, R., Haftor, D. M., & Staniewski, M. W.
(2024). Intelligent Transformation: Navigating the
AI Revolution in Business and Technology.
Contributions to Management Science, Part F3131,
19 – 40. https://doi.org/10.1007/978-3-03158704-7_2
Darlington, E., & Masson, J. (2021). What does cocreation mean? An attempt at definition informed
by the perspectives of school health promoters in
France. Health Education Journal, 80(6), 746 – 758.
https://doi.org/10.1177/00178969211013570
Delgadillo, J., Kinyua, J., & Mutigwe, C. (2024). FinSoSent:
Advancing Financial Market Sentiment Analysis

REVENUE JOURNAL: MANAGEMENT AND ENTREPRENEURSHIP 2(1): 1 4 - 2 3

101

through Pretrained Large Language Models. Big
Data
and
Cognitive
Computing,
8(8).
https://doi.org/10.3390/bdcc8080087

from the SDGs reporting perspective. Sustainability
(Switzerland),
12(3).
https://doi.org/10.3390/su12030798

Destari, F., Handriana, T., Afandi, M. F., & Komariyah, S.
(2024). Holistic analysis of social media user
behavior in agricultural context: Bibliometric
analysis and systematic review. International
Journal of Data and Network Science, 8(3), 1659 –
1678. https://doi.org/10.5267/j.ijdns.2024.3.001

Jia, H. (2024). Financing constraints, major business
performance, and return on financial assets.
Finance
Research
Letters,
66.
https://doi.org/10.1016/j.frl.2024.105653

Falter, E., & Neville, S. (2020). William Shakespeare’s
Much A-Zoom About Nothing. International Journal
of Performance Arts and Digital Media, 16(3), 306 –
318.
https://doi.org/10.1080/14794713.2020.183182
8
Filatov, E. (2019). Author’s integrated methods of
analysis of the model of return on assets of
construction companies. IOP Conference Series:
Materials Science and Engineering, 667(1).
https://doi.org/10.1088/1757899X/667/1/012024
García-Sánchez, I. M. (2020a). Do institutional investors
drive corporate transparency regarding business
contribution to the sustainable development goals?
Business Strategy and the Environment, 29(5),
2019–2036. https://doi.org/10.1002/bse.2485
García-Sánchez, I. M. (2020b). “Sell” recommendations
by analysts in response to business communication
strategies concerning the Sustainable Development
Goals and the SDG compass. Journal of Cleaner
Production,
255.
https://doi.org/10.1016/j.jclepro.2020.120194
Gerkens, S., & Merkur, S. (2020). Belgium: Health System
Review. Health Systems in Transition, 22(5), 1 – 237.
https://www.scopus.com/inward/record.uri?eid=
2-s2.085100717688&partnerID=40&md5=01184270ad
0b7cc7e3f510c8fa74818a
Gold, M. (2003). Banking on enterprise E-learning. T and
D,
57(8),
48–53+73.
https://www.scopus.com/inward/record.uri?eid=
2-s2.03042811426&partnerID=40&md5=9f82b0559b8
b621d9d7c8e0ce36a7832
Hasan, M. R. (2024). Towards a Holistic Halal
Certification Self-Declare System: An Analysis of
Maqāṣid
al-Sharīʿah-Based
Approaches
in
Indonesia and Malaysia. Mazahib Jurnal Pemikiran
Hukum
Islam,
23(1),
41–78.
https://doi.org/10.21093/mj.v23i1.6529
Hendarto, T., Nursaid, N., & Nadaroglu, H. (2024). Retail
Companies: The Impact of Brand Image,
Advertising, Promotional, and Capital Spending on
Financial
Performance.
Revenue
Journal:
Management and Entrepreneurship, 2.
Ionaşcu, E. (2020). The involvement of real estate
companies in sustainable development-An analysis
102

Karami, A., Kadari, R. R., Panati, L., Nooli, S. P.,
Bheemreddy, H., & Bozorgi, P. (2021). Analysis of
geotagging behavior: Do geotagged users represent
the twitter population? ISPRS International Journal
of
Geo-Information,
10(6).
https://doi.org/10.3390/ijgi10060373
Kramer, T., Groh, G., Stüben, N., & Soyka, M. (2024).
Analysis of addiction craving onset through natural
language processing of the online forum Reddit.
PLoS
ONE,
19(5
May).
https://doi.org/10.1371/journal.pone.0301682
Kwon, W.-S., Woo, H., Sadachar, A., & Huang, X. (2021).
External pressure or internal culture? An
innovation diffusion theory account of small retail
businesses’ social media use. Journal of Retailing
and
Consumer
Services,
62.
https://doi.org/10.1016/j.jretconser.2021.10261
6
Liew, S. Y., Rana, M. E., Hameed, V. A., & Safavi, S. (2023).
Navigating the Retail 4.0 Landscape: The
Transformative Impact of Cloud Computing. 2023
IEEE 21st Student Conference on Research and
Development, SCOReD 2023, 499 – 507.
https://doi.org/10.1109/SCOReD60679.2023.105
63349
Liu, C. (2021). Business strategy and sustainable
development: Evidence from China. Business
Strategy and the Environment, 30(1), 657–670.
https://doi.org/10.1002/bse.2645
Liu, G. (2015). Influence mechanism research of store
image for consumer brand loyalty: Empirical study
formedicine retail industry. Advances in Intelligent
Systems and Computing, 362, 1419–1431.
https://doi.org/10.1007/978-3-662-47241-5_118
Mohammad, A. A. A. (2024). The Influence of Social
Commerce Dynamics on Sustainable Hotel Brand
Image, Customer Engagement, and Booking
Intentions. Sustainability (Switzerland), 16(14).
https://doi.org/10.3390/su16146050
Noori, A. (2019). An investigation on how brand image
influences tourist destination and customer
satisfaction: A case of the tourism sector.
International Journal of Scientific and Technology
Research,
8(11),
3553–3559.
https://www.scopus.com/inward/record.uri?part
nerID=HzOxMe3b%5C&scp=85075527292%5C&
origin=inward
Ozduran, E., & Büyükçoban, S. (2022). A content analysis
of the reliability and quality of Youtube videos as a
source of information on health-related postLUSI Burst: Overcoming … / Retno Tri Nalarsih

COVID
pain.
PeerJ,
https://doi.org/10.7717/peerj.14089

10.

Pacheco-Velazquez, E., Rodes-Paragarino, V., &
Marquez-Uribe, A. (2024). Exploring educational
simulation platform features for addressing
complexity in Industry 4.0: a qualitative analysis of
insights from logistics experts. Frontiers in
Education,
9.
https://doi.org/10.3389/feduc.2024.1331911
Pessanha, G. R. G., & Soares, E. A. (2021). Just one post?
Forecasts of daily sales of beauty and cosmetics
retail companies based on the influence of social
media; [Apenas uma postagem? Previsões de
vendas diárias de empresas varejistas de beleza e
cosmético a partir da influência de mídias sociai.
Revista
Brasileira
de
Marketing,
20(4).
https://doi.org/10.5585/remark.v20i4.17914
Pham, S. D. (2024). Impact of climate policy uncertainty
on return spillover among green assets and
portfolio implications. Energy Economics, 134.
https://doi.org/10.1016/j.eneco.2024.107631
Quynh, N. H. (2019). The moderating influence of brand
image on the relationship between customer
engagement and customer loyalty. Indian Journal of
Marketing,
49(9),
42–56.
https://doi.org/10.17010/ijom/2019/v49/i9/14
6939
Rezvan, M., Shekarpour, S., Alshargi, F., Thirunarayan, K.,
Shalin, V. L., & Sheth, A. (2020). Analyzing and
learning the language for different types of
harassment.
PLoS
ONE,
15(3).
https://doi.org/10.1371/journal.pone.0227330
Rusdiyanto. (2020). The effect of earning per share, debt
to equity ratio and return on assets on stock prices:
Case
study
Indonesian.
Academy
of
Entrepreneurship Journal, 26(2), 1–10.
Saltos-Rivas, R., Novoa-Hernández, P., & Rodríguez, R. S.
(2021). On the quality of quantitative instruments
to measure digital competence in higher education:
A systematic mapping study. PLoS ONE, 16(9
September).
https://doi.org/10.1371/journal.pone.0257344
Sawhney, R. (2018). Leveraging tax as a tool for financial
inclusion of MSMEs: Micro, small, and medium
enterprises (MSMEs) and financial exclusion.
Marketing Techniques for Financial Inclusion and
Development,
224–239.
https://doi.org/10.4018/978-1-5225-40359.ch011
Seraj, A. H. A. (2022). Entrepreneurial Competency,
Financial Literacy, and Sustainable Performance—
Examining the Mediating Role of Entrepreneurial
Resilience
among
Saudi
Entrepreneurs.
Sustainability
(Switzerland),
14(17).
https://doi.org/10.3390/su141710689

SUSTAINABLE DEVELOPMENT IN BUSINESS. In
Sustainable Development in Business. Universiti
Putra
Malaysia
Press.
https://www.scopus.com/inward/record.uri?eid=
2-s2.085207535598&partnerID=40&md5=4a56734b79
9c5a5e4cfe2984340b28a8
Sparrow, R., Dartanto, T., & Hartwig, R. (2020).
Indonesia Under the New Normal: Challenges and
the Way Ahead. Bulletin of Indonesian Economic
Studies,
56(3),
269
–
299.
https://doi.org/10.1080/00074918.2020.185407
9
Suparno, D. (2023). The influence of financial literacy,
digital literacy, digital marketing, brand image and
word of mouth on the z generation’s interest in
Islamic banks. International Journal of Data and
Network
Science,
7(4),
1975–1982.
https://doi.org/10.5267/j.ijdns.2023.6.015
Weimer, A. M., Berthold, R., Schamberger, C., Vieth, T.,
Balser, G., Berthold, S., Stein, S., Müller, L., Merkel,
D., Recker, F., Schmidmaier, G., Rink, M., Künzel, J.,
Kloeckner, R., & Weimer, J. (2023). Digital
Transformation in Musculoskeletal Ultrasound:
Acceptability of Blended Learning. Diagnostics,
13(20).
https://doi.org/10.3390/diagnostics13203272
Wesseling, J. H. (2015). Business Strategies of
Incumbents in the Market for Electric Vehicles:
Opportunities and Incentives for Sustainable
Innovation. Business Strategy and the Environment,
24(6),
518–531.
https://doi.org/10.1002/bse.1834
Wijayanto, Z., Sukestiyarno, Y. L., Wijayanti, K., &
Pujiastuti, E. (2023). Harnessing Sociographs to
Design Discussion Groups for Mathematics
Learning: A Social Network Analysis Approach.
TEM
Journal,
12(4),
2305
–
2311.
https://doi.org/10.18421/TEM124-41
Yang, H. (2023). The influence of the brand image of
green agriculture products on China’s consumption
intention-The mediating role of perceived value.
PLoS
ONE,
18(10).
https://doi.org/10.1371/journal.pone.0292633
Yu, L., Xu, W., Sukjairungwattana, P., & Yu, Z. (2023). A
Meta-Analysis of Facebook-Assisted Learning
Outcomes in Different Countries or Regions.
International Journal of Information Technology
and
Web
Engineering,
18(1).
https://doi.org/10.4018/IJITWE.319312
Zhang, Y., Liao, C., Liu, J., Zhang, Y., Gui, S., & Wei, Q.
(2024). Unveiling the Nexus: Influence of learning
motivation on organizational performance and
innovative climate of Chinese firms. PLoS ONE, 19(5
May).
https://doi.org/10.1371/journal.pone.0304729

Sidek, S., Abdullah, M. R., & Leong, E. C. (2024).
REVENUE JOURNAL: MANAGEMENT AND ENTREPRENEURSHIP 2(1): 1 4 - 2 3

103

104

LUSI Burst: Overcoming … / Retno Tri Nalarsih