Liquidity and Subsidiary Performance in a Diversified Telecommunications Group: The Moderating Role of Business Portfolios

This paper investigates whether cash flow management explains cross-subsidiary variation in performance within an anonymized Indonesian telecommunications group (“ParentCo”), and whether business portfolio type moderates these relationships. Using audited panel data for 40 subsidiaries over 2014–2023, we estimate fixed-effects and moderated regression models linking operating (CFO), investing (CFI), and financing (CFF) cash flows and liquidity (quick ratio) to return on assets (ROA). Descriptive evidence indicates wide dispersion in cash flows and ROA across units. Econometric results show that liquidity, as measured by the quick ratio, is positively and significantly associated with ROA, whereas CFO, CFI, and CFF exhibit no direct significant effects. Portfolio type significantly strengthens the quick ratio–ROA linkage—particularly in connectivity and digital segments—while interactions with CFO, CFI, and CFF are not robust. The findings extend resource-based arguments by showing that the performance salience of short-term liquidity is portfolio-contingent in capital-intensive, fastmoving environments. Limitations include the single-group context and ten-year window; future work should broaden sectors, extend time horizons, and incorporate additional moderators such as competitive intensity and leverage.