What does this research mean for the field?

Corporate social responsibility positively affects return on assets and return on equity, but has no significant impact on net profit margin in food and beverage companies. Novelty: ClaimNovelty.INCREMENTAL. Consensus alignment: ConsensusAlignment.NEUTRAL.

What question did this study set out to answer?

This study analyzes the impact of corporate social responsibility on financial performance metrics including return on assets, return on equity, and net profit margin.

December 24, 2022Open Access

The Effect of Corporate Social Responsibility on Return on Assets, Return on Equity, and Net Profit Margin: Study of Food and Beverage Sub-Sector Companies Listed in the Indonesia Stock Exchange, 2016-2021

Key Points

This study analyzes the impact of corporate social responsibility on financial performance metrics including return on assets, return on equity, and net profit margin.
Examined thirty food and beverage companies listed on the Indonesia Stock Exchange from 2016 to 2021.
Used purposive sampling to select six companies meeting criteria.
Analyzed data using simple linear regression with SPSS 23 software.
Corporate social responsibility positively and significantly affects return on assets.
Corporate social responsibility positively and significantly affects return on equity.
Corporate social responsibility shows no significant effect on net profit margin.

Abstract

This study aims to analyze the effect of corporate social responsibility (CSR) on financial performance, which is proxied by the ratios of return on assets (ROA), return on equity (ROE), and net profit margin (NPM). This study examined thirty populations of food and beverage sub-sector companies listed on the Indonesia Stock Exchange in 2016–2021. The sampling technique used was a non-probability sampling technique using purposive sampling, so that of the thirty listed companies, six companies met the sampling criteria. To analyze the data, simple linear regression analysis was used using SPSS 23 software. The results showed that: (1) corporate social responsibility has a positive and significant effect on return on assets; (2) corporate social responsibility has a positive and significant effect on return on equity; and (3) corporate social responsibility has no significant effect on net profit margin.

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