Determinant of Return on Assets and Equity and Industry Wise Effects: Evidence from KSE (Karachi Stock Exchange)

Mubeen, Muhammad; Lal, Irfan; Hussain, Adnan

doi:10.2139/ssrn.2372792

Cited by 11 publications

(13 citation statements)

References 2 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Furthermore, they endeavoured to address their question with respect to the hazard of interest in exceedingly utilized organization as far as profit for value and ran over the way that exceptionally utilized firms were less unsafe in both market-based and bookkeeping based measures. Mubin, Iqbal & Hussain (2014) have recognized the most predictable or unpredictable DuPont part among profit margin, total asset turnover and equity multiplier in Fuel and Energy Sector, Chemicals Sector, Cement Sector, Engineering Sector, Textiles Sector and Transport and Communication Sector of KSE 100 index. Their exploration found that asset turnover is the most persuasive segment of DuPont structure that decides the productivity of organizations working in Pakistan.…”

Section: Discussionmentioning

confidence: 99%

“…Although the traditional DuPont Model and its modifications clearly illustrate that Company's Return on Equity can be identified on the basis of three factors comprising of Profit Margin, Total Assets Turnover and Equity Multiplier; however, analysts, investors and researchers are still trying to identify the most impactful factor of profitability indicator i.e. Return on Equity (Mubin, Iqbal & Hussain, 2014). This research paper mainly focuses the impact of key indicators of Du-Pont equation on the profitability of the firms in the presence of macroeconomic factors (exchange rates, GDP, inflation and interest rates) to ascertain the most impactful driver of profitability in five different sectors of Pakistan's economy comprising of automobile sector, cement sector, fertilizer sector, oil & gas sector and power generation & distribution sector.…”

mentioning

confidence: 99%

See 1 more Smart Citation

Drivers of Profitability in Pakistan Stock Exchange (PSX) Through Du-Pont Equation

Ahmed

Siddiqui

2019

SSRN Journal

View full text Add to dashboard Cite

This research paper aims to investigate the impact of different components of Du-Pont model on firms' profitability (1) on stand-alone basis, and (2) in the presence of different macroeconomic factors. These components include profit margin, total assets turnover and financial leverage. Financial information from five different sectors of Pakistan's economy comprising of automobile, cement, fertilizer, oil and gas and power & distribution was collected for years ranging from FY2011 to FY2017. Few macroeconomic factors such as Exchange Rates, GDP, Inflation, and Interest rates are also taken into consideration. In this paper, LS and GMM regression models have been implied on Du-Pont model (financial ratios) and the results indicate that profit margin is a major driver of profitability amongst all the other factors of Du-Pont across various economic sectors of economy of Pakistan. Hence, the business managers should exert more focus on adjusting the micro-economic factors, perhaps profitability, while adapting to macroeconomic factors

show abstract

Section: Discussionmentioning

confidence: 99%

mentioning

confidence: 99%

Drivers of Profitability in Pakistan Stock Exchange (PSX) Through Du-Pont Equation

Ahmed

Siddiqui

2019

SSRN Journal

View full text Add to dashboard Cite

show abstract

“…Mubin, Iqbal and Hussain [18] identified different companies data that shows the assets turnover, vary companies to companies which affect the return on equity also. Velnampy and Niresh [19] the total capital of firms usually based on equity and debt of the firms.…”

Section: Return On Equity (Roe)mentioning

confidence: 99%

The Relationship between Customer Satisfaction and Return on Equity in Banking Sector

2018

Adv. in Nat. Appl. Sci.

View full text Add to dashboard Cite

“…Emerging crises in United States, Asian Stock Markets and Stock Markets in various part of Europe in late 90s and early 2000s have given enough evidence to the evolving study of financial ratios. Nowadays, financial ratios are being widely used in essential examination to determine the impending stock performance (Mubin et al, 2014). Different new ratios have been developed in this regards, such as book value, price earnings ratio, cash flows price ratio etc.…”

Section: Introductionmentioning

confidence: 99%

“…Financial ratios are used to stimulate rational investment choices. Significance of financial ratios can be judged differently amongst various industries (Mubin et al, 2014) and from country to country (Tsai et al, 2011). Thus, choosing suitable ratios are very crucial in increasing forecast success rate.…”

Section: Introductionmentioning

confidence: 99%

Prediction of stock performance by using logistic regression model: evidence from Pakistan Stock Exchange (PSX)

Ali

Mubeen

Lal

et al. 2018

AJER

View full text Add to dashboard Cite

The key purpose behind the study is to use logistic regression model to predict stock performance. For this purpose different financial and accounting ratios were used as independent variables and stock performance (either "good" or "poor") as dependent variable. The result shows that financial and accounting ratios significantly predict the stock performance. Our study consists on the sample period of annual data from 2011-2015 and comprises of 109 listed non-financial firms of Pakistan's Stock Exchange (PSX). Our sample was shortlisted on the basis of available data of Market Capitalization. Our research examines sales growth, debt to equity ratio, book to price ratio, earning per share, return on equity and current ratio for the prediction of stock performance. The findings indicate that our prediction was 89.77 percent accurate for prediction good as well as bad performance of stock. Although we did not consider macroeconomic variable to forecast stock return performance but our six firm specific accounting and financial ratios were good enough to predict stock performance. This study shows that Logistic regression model can be used by investors, individual as well as institutions or fund managers to enhance their ability to predict "good or poor" stock. Contribution/ Originality This paper contributes by applying the logistic regression model of Altman (1968) and Ohlson (1980) using ML technique for the stock performance prediction of nonfinancial firms in Pakistan Stock Exchange. To increase prediction power of stock performance accounting and financial ratios as suggested by Fama and French models (1988 and 2017) were incorporated.

show abstract

Determinant of Return on Assets and Equity and Industry Wise Effects: Evidence from KSE (Karachi Stock Exchange)

Cited by 11 publications

References 2 publications

Drivers of Profitability in Pakistan Stock Exchange (PSX) Through Du-Pont Equation

Drivers of Profitability in Pakistan Stock Exchange (PSX) Through Du-Pont Equation

The Relationship between Customer Satisfaction and Return on Equity in Banking Sector

Prediction of stock performance by using logistic regression model: evidence from Pakistan Stock Exchange (PSX)

Contact Info

Product

Resources

About