The Effect of Operating, Investing, and Financing Cash Flows on Corporate Liquidity: A Case Study of an Indonesian Consumer Goods Company

Abstract

This study aims to analyze the ability of cash flows from operating, investing, and financing activities to support the liquidity of PT Unilever Indonesia Tbk during the 2020–2025 period by using cash flow ratio analysis. This study employs a quanitative research method with a descriptive approach. The data are collected through documentation techniques using secondary data in the form of the Annual Reports and annual financial statements of PT Unilever Indonesia Tbk for the 2020–2025 period. The data are analyzed using the Operating Cash Flow Ratio (AKO), Cash Flow Coverage Ratio (CAD), Cash Coverage to Current Liabilities Ratio (CKHL), Capital Expenditure Ratio (PM), and Total Debt Ratio (TH). The results are then compared with the standard of each ratio and analyzed descriptively. The results show that the cash flow performance of PT Unilever Indonesia Tbk in supporting its liquidity during the 2020–2025 period is generally categorized as fairly good. The Cash Coverage to Current Liabilities Ratio (CKHL), Capital Expenditure Ratio (PM), Total Debt Ratio (TH), and Cash Flow Coverage Ratio (CAD) meet the required standards, while the Operating Cash Flow Ratio (AKO) remains below the standard throughout the study period. Nevertheless, the company is still able to meet its short-term obligations, finance its capital expenditures, fulfill its financing commitments, and settle its total liabilities through effective cash flow management.