Revenue to Roe Transmission: The Mediating Role of EBIT and Cash Flow
in the Seafood Industry


Volume 11, Issue 1
Le Bao Toan, Vo The Truong

Published online: 20 December 2025
Article Views: 20
 
AbstractReferencesCite
This study establishes a systematic analytical framework to explore the financial value transmission mechanism within listed seafood enterprises in Vietnam. By integrating the Resource-Based View, the Cash Conversion Cycle Theory, and Signaling Theory, the research constructs a structural path model to examine the sequential linkages from input resources to Return on Equity (ROE). A structural equation modeling approach was employed to clarify
the roles of key mediating variables, including Earnings Before Interest and Taxes (EBIT) and Operating Cash Flow (OCF). The empirical results indicate that Revenue (REV) serves as the primary driver, significantly boosting operating profit (beta = 0.802, p < 0.01). Notably, the study establishes the full mediating role of EBIT in converting sales into cash flow, while OCF acts as the essential “link” that ensures accounting profits are crystallized into actual shareholder value through the ROE index. A pivotal and industry-specific finding of this research is the assertion of the paramount position of cash flow within the value chain: Operating cash flow is the most critical factor, surpassing indicators of scale or book profits. While firm size exerts negative pressure on liquidity (beta = -0.186), the capacity for actual cash generation serves as the ultimate proof of earnings quality and the final destination of all operational activities. Based on these findings, the study proposes strategic managerial implications, emphasizing a shift from pure scale growth to optimizing internal conversion efficiency. Enterprises should prioritize managing cash flow as a vital “lifeblood” to maintain sustainable financial health and send reliable signals to the investment market.

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Toan, L. B. \& Truong, V.T. (2025). Revenue to Roe Transmission: The Mediating Role of EBIT and Cash Flow in the Seafood Industry. International Journal of Business and Administrative Studies, 11(1), 44-57. https://dx.doi.org/10.20469/ijbas.11.10005-1