Factors affecting profitability in Malaysia

Review of European Studies, 2015

This study investigates the determinants of profitability for industrial firms in Oman. Therefore, a sample of 17 industrial companies listed on Muscat securities market covering the period from 2006 till 2013 is utilized. Results from the panel ordinary least squares model reveal a positive and statistical significant relationship between profitability, the firm size, growth, fixed assets and working capital. On the other hand, the average tax rate and the financial leverage variables show a negative relationship with profitability. However, this relationship is significant only for the financial leverage variable. The study concludes that large growing firms with efficiently managed assets improve revenue and ultimately enhance profitability.

2015

Profitability is one of the important roles that gauge the growth of financial organization. Using a data set period 2001 to 2011, this paper evaluates the impacts of internal and external determinants conditions towards the profitability of financial institution by using static panel data analysis that consist of 21 organization that listed in Bursa Malaysia. The specific determinants of profitability include equity management, asset management, size of organization and inflation. This study employs regression model in order to investigate the relation of explanatory variables towards profitability. This study supports strong recommendations that internal factors should be taken into account when determining profitability of a firm but external factor should have more evaluation and analysis because there is positive insignificant result appear. This study suggests that equity management is the most eligible factor that the variation of profitability. The highest of equity manageme...

The determinants of companies' profitability in various industries are very important in all aspect. However, few studies did focus on analysing the profitability in telecommunication sectors, specifically in Malaysian market. Therefore, this paper aims to explore the factors of selected variables may give impact to the profitability, focusing on listed telecommunication companies in Bursa Malaysia. Using secondary method, financial data of five out of twelve telecommunication companies for ten years (2009 to 2018) was derived from DataStream Professional and being analysed using Stata10. Firm size (SIZE), liquidity (CR), working capital (WC) and leverage (DR) has been selected as independent variables while profitability as dependent variable. The results confirmed that leverage is positive significant while liquidity resulted in positive insignificant relationship effect to return on assets. Conversely, firm size and working capital are negative significant effect to return on assets. That said, this paper makes a significant contribution to the theoretical literature, the industry, and policymakers, so that the performance of telecommunication industry can be improved.

International Journal of Research Publication and Reviews, 2022

This article presents to find out the motivate managers in managing earnings, including profitability, leverage, and company size. This studies is still a hot topic of discussion among researchers, so much research has been conducted since 2018. This study aims to discuss the effect of profitability, leverage, company size on earnings management in LQ 45 companies listed on the Indonesia Stock Exchange for the 2018-2020 period. This study uses descriptive statistical analysis using secondary data with descriptive statistical tests. Followed by the classical assumption test using the multiple regression model hypothesis testing method. Several conclusions can be drawn that there is profitability that has no effect on earnings management, the leverage variable has a negative effect on earnings management, the firm size variable has no negative effect on earnings management. It is recommended for further research to increase the number of years tested, so that the research results can be more accurate.

European Journal of Business and Management, 2013

The study investigates the determinants of corporate profitability in developing economies, with main emphasis on the Nigerian context. The study analyzes the relationship between capital structure, firm size, cash liquidity, financial leverage and corporate profitability. A panel data consisting of forty (40) randomly selected companies, spanning a period of five (5) years was utilized for the study. The ordinary least square regression was used to analyze the existence of relationships among the dependent and independent variables. A positive relationship was found to exist between firm size and corporate profitability, and financial leverage and corporate profitability. Capital structure and cash liquidity exhibited negative relationships with corporate profitability. The study recommended the use of different indices of profitability; as differing results are possible. The study further proposed the inclusion of additional variables in order to improve the stability and explanatory power of the overall model.

This paper aims to investigate whether factors such as capital structure, working capital, firm size, non-debt tax shield and growth rate, determining profitability have any impact on profitability of selected manufacturing companies listed on Colombo stock exchange, Sri Lanka over a period of five years from 2008 to 2012. This study employs multiple regression analysis to measure relationship among variables, individual and overall impact on profitability and to test the operational hypotheses. The results revealed that whereas all independent variables explain 76.6% and 84.7% of the variance on ROA and ROE respectively where significant is at 5% levels, the overall model has a significant impact on profitability at the rate of 80.5 % (Adjusted R 2 = 80.5%, P<.0.05). Further, while capital structure (+) and non-debt tax shield (+) have statistically significant impact on profitability (P < 0.05), the remaining working capital (+), growth rate (-) and firm size (+) have no significant effect on the profitability (P > 0.05).

Research Journal of Finance and Accounting, 2014

The purpose of this study is to identify the determinants of firm's profitability of Pakistani firms. The variables used in this study are capital structure, financial leverage, firm size and corporate profitability. The data was collected from 50 companies for period of 7 years from website of Karachi stock exchange. The ordinary least square regression was used to observe relationships among the dependent and independent variables. This study finds positive correlation among financial leverage and corporate profitability, and firm size and corporate profitability. Capital structure revealed negative relationships with corporate profitability. The study further anticipated the addition of supplementary variables to recover the strength and descriptive power of the general model.

2021

Article history: Received: November 28, 2020 Received in revised format: December 28 2020 Accepted: February 7, 2021 Available online: February 7, 2021 The purposes of this research were to understand the profitability performance and its influencing factors based on DuPont Analysis and the effect toward the value of the firm. As a causality research, the sample data involved were 20 non-banking and finance companies as listed on LQ-45 of Indonesian Stock Exchange (IDX) years of 2014-2018, which could be classified into two types of industry; manufacture and non-manufacture sectors. The research’s quantitative design as a systematic approach of the relation among the variables focusing on the hypothesis testing done by data analysis tools using GLS Regression test of panel data. Profitability determinants of net profit margin, total assets turnover and financial leverage multiplier showed the result of positive and significant effect toward ROE (return on equity), while growth sales...

International Journal of Economics and Business Administration, 2020

Purpose: The purpose of this study is to explore the most significant profitability determinants of the manufacturing companies in Indonesia. Design/Methodology/Approach: Several independent variables examined for their influence on profitability were working capital, firm size, firm growth, capital structure, and non-debt tax shields. The sample of this study were manufacturing firms listed on the Indonesia Stock Exchange from 2010 to 2017. The number of samples were 350 manufacturing companies. Findings: The results of this study indicate that working capital, firm size and firm growth were positively related to profitability. Meanwhile, capital structure and non-debt tax shield did not affect profitability. The findings of this study were consistent with the pecking order theory and the financial agency theory. Practical implications: This study implies that managers need to adjust their investment needs with the profitability that has been achieved and the total assets of the company, and to maximize the value of the company by managing current assets so that the rate of the return on marginal investment is equal to or greater than the cost of capital used to finance the current assets. Furthermore, financial managers must be able to determine essential investment objectives by maximizing the use of assets and fixed assets which are expected to make the company to enjoy the sales growth in the future. Originality/Value: Although this study organically builds upon recent studies about the firms' profitability, it conducted in the new administrative setting in Indonesia, which is the Widodo's administration. Widodo's administration supports the manufacturing industry to be able to compete globally.

International Journal of Financial Research, 2019

This study examines the relationship between liquidity, growth and profitability of non-financial firms listed on the Bursa Malaysia. Specifically, this study examines the relationship between liquidity and growth on profitability for 50 non-financial public listed firms in Malaysia. Using panel data technique on 250 observations across a five-year period, this study shows that liquidity has a strong positive relationship with profitability in terms of return on asset of the firms. However, liquidity in terms of quick ratio has no impact on profitability. This study also shows that firm growth in terms of sales growth has a negative relationship with profitability. However, this study shows that liquidity and growth in general do not influence profitability in terms of return on equity, although the result shows that sustainable growth rate has a positive relationship on profitability. This study highlights the importance of these measures in measuring performance. The findings in t...