Investigating the causal structure of financial performance in the livestock sector in Indonesia: A causal-loop diagram approach
Mujtahidah A.U.Muzayyanah
, Nurul Hasanah Uswati Dewi
Abstract: The livestock sector faces operational and financial challenges. Financial monitoring of livestock businesses is crucial for developing opportunities, identifying problems early, optimizing operations, and maximizing profits.
This study aimed to investigate and understand the causal and effect of financial performance of livestock companies in Indonesia. The quarterly data from the financial reports announced every quarter from 2020 to 2022 were used to calculate financial performance indicators. The causal relationships among financial variables were created using a Causal-Loop Diagram (CLD). From a financial perspective, the components are necessary for constructing the model. Our study provides an overview of financial ratios used to examine the financial performance of livestock companies, as well as their limitations. The obtained results of financial ratio analysis showed that, overall, the selected companies can generate profits by utilizing more of their assets or equity. Our CLD model in this research offers new insights into the causal relationships between drivers of financial performance in livestock industries, such as desired sales and operating revenue, marketing budget, and production budget. Our findings explain how using a causal loop approach during financial performance evaluation can help policymakers and businesses/investors understand program implementation and variations in program outcomes related to livestock business sector development. Effective management and planning are necessary to develop efficient and practical strategies that optimize livestock production and economic benefits.
Keywords: causal-loop diagram; financial performance; Indonesia; livestock sector
Citation: Muzayyanah, M. A. U. & Dewi, N. H. U. (2025). Investigating the causal structure of financial performance in the livestock sector in Indonesia: A causal-loop diagram approach. Bulg. J. Agric. Sci., 31(5), 860–872
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| Date published: 2025-10-28
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