The relationship between Cash Flow and Profitability and Return on Investment of Listed Companies Agricultural and Food Industry on the Stock Exchange of Thailand

Abstract

The objectives of this research were twofold: 1) to investigate the relationship between cash flow and profitability efficiency of companies in the Agricultural and Food Industry sector listed on the Stock Exchange of Thailand (SET), and 2) to examine the relationship between profitability efficiency and return on investment within the same sector. The sample consisted of 46 companies, yielding a total of 230 firm-year observations. The secondary data were collected over a five-year period from 2020 to 2024. Data collection instruments included Annual Information Forms, Annual Reports, and Form 56-1 One Reports (Structured Data Reports). The statistical methods employed for data analysis included descriptive statistics (minimum, maximum, mean, and standard deviation), correlation coefficient analysis, and multiple regression analysis to test the hypotheses across five equations.

The research findings were as follows: Firstly, regarding the relationship between cash flows and profitability efficiency, the results revealed that operating cash flow, investing cash flow, and financing cash flow exhibited a statistically significant positive relationship with core operating profit and ROA. Conversely, net cash flow demonstrated a statistically significant negative relationship with both core operating profit and ROA. Furthermore, concerning ROE, only operating cash flow showed a significant positive relationship, whereas investing cash flow, financing cash flow, and NCF had no statistically significant relationship with ROE. Secondly, regarding the relationship between profitability efficiency and return on investment, ROA was the only factor that was positively and significantly associated with both PRI and DY.