Factors Influencing The Companies‘ Profitability

Burja, Camelia

doi:10.29302/oeconomica.2011.13.2.3

Cited by 63 publications

(68 citation statements)

References 5 publications

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“…In other words, the use of financial leverage possibly exerts positive influence on the corporate performance. This is consistent with what have been reported by Burja (2011), Seelanatha (2011, Nirajini and Priya (2013), Sivathaasan et al (2013), Ghayas and Akhter (2018). However, the use of financial leverage can also bring firms more financial risks.…”

Section: Financial Leverage and Firm Performancesupporting

confidence: 93%

How do financial leverage and supply chain finance influence firm performance? Evidence from construction sector

Bui¹

2020

10.5267/j.uscm

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This paper investigates the impact of financial leverage and supply chain finance on firm performance of Vietnamese construction sector. Although there is a big gap in the literature needed to be filled, little empirical evidence can be found on this interesting topic. Therefore, the results are essential for Vietnamese firms, particularly those in construction industry. By adopting the generalized method of moment (GMM), the results reveal the significant influence of financial leverage and supply chain finance on the performance of construction firms. In particular, firm performance (FP) is more influenced by financial leverage (FL) than supply chain finance (SCF). The findings also show that supply chain finance plays a key role in enhancing firm performance. Meanwhile, more debts and their inefficient use exert a negative impact on firm performance, which is an unprecedented finding of this study..

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Section: Financial Leverage and Firm Performancesupporting

confidence: 93%

How do financial leverage and supply chain finance influence firm performance? Evidence from construction sector

Bui¹

2020

10.5267/j.uscm

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“…This view has also been confirmed by Kester (1986), Titman and Wessels (1988), Rajan and Zingales (1995), Samarakoon (1999), Booth, Aivazian, Demirgusc-Kunt, and Maksimovic (2001), and Al-Jafari and Samman (2015). On the contrary, Ifeduni and Charlse (2018) found higher profitability because of higher gearing (debt).Expense to revenue ratio has significant negative impact on profitability found by Burja (2011).…”

Section: Review Of Literaturementioning

confidence: 96%

“…The higher expense to revenue ratio of the firm indicates lower profitability. Expense to revenue ratio has negative impact on profitability partially supporting (Burja, 2011). Leverage in this study is calculated by dividing total liabilities to the total assets of the firm.…”

Section: 919mentioning

confidence: 99%

An Inferential Study on the Profitability Determinants of the Cement Industry in Bangladesh

Rezina¹,

Ashraf²,

Khan³

2020

asfbr

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This paper examines the impacts of firm-specific and macroeconomic factors in determining the profitability of the cement industry in Bangladesh. This study took stock exchange listed all cement companies of Bangladesh as samples and covered the period of 2000–2018. Return on Assets (ROA) was chosen as the dependent variable and firm size, expense to revenue ratio, leverage, age, inflation rate, GDP growth rate, and real interest rate were chosen as independent variables where the first four are firm-specific and the other three are macroeconomic factors. This study considered ROA as the profitability measurement of the firms. The study found that leverage, GDP growth rate, and real interest rate have significant impacts on the profitability. Firm size, age, GDP growth rate, and real interest rate have a positive impact whereas expenses to revenue ratio, leverage, and inflation have a negative impact on the profitability of the firms under the cement industry.

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“…Some researchers such as Asimakopoulos et al (2009) and Al-Jafari and Samman (2015) found that leverage is negatively correlated to financial performance; the reason is that high debt requires more resources to pay the debt. However, others like Burja (2011), Humera et al (2011 argue that additional debt can be implemented in a good investment, which will increase financial performance.…”

Section: Leveragementioning

confidence: 99%

Determinants of financial performance of listed firms manufacturing food products in Vietnam: regression analysis and Blinder–Oaxaca decomposition analysis

Kim

Duvernay

Thanh

2021

JED

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PurposeThis article studies the impact of micro and macro factors on firm performance in the context of an emerging economy just changed from a subsidized economy to a market economy.Design/methodology/approachThe authors carried out an investigation into 30 listed food processing companies in Vietnam from 2014 to 2019. The data are analyzed by using STATA software. In this study, beside the regression analytical technique, the Blinder–Oaxaca decomposition analysis is used to study more deeply the effect of variables on financial performance of food processing companies, so its results are reliable base to give suggestions.FindingsThe results of empirical research help us to have some following conclusion. First, two variables consisting of total assets turnover ratio (ATR) and growth in sales significantly influence financial performance, when it is measured by return on equity (ROE) or return on sales (ROS). Second, leverage significantly negatively impacts return on sale. Third, there are difference in financial performance and the effect of predictors on dependent variable “ROS” between state-owned enterprises (SOEs) and non SOEs, and the causes come from the component effect.Originality/valueIn fact, although a range of previous researches on that topic have been carried out, none of them dig deeper reasons resulting to the differences in financial performance between SOEs and non SOEs, whereas Vietnamese economy has just changed to a market economy since 1986, making impacts of State ownership totally different from other countries. In this study, the authors use the t-test and analysis to have more accurate conclusions about that problem.

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Factors Influencing The Companies‘ Profitability

Cited by 63 publications

References 5 publications

How do financial leverage and supply chain finance influence firm performance? Evidence from construction sector

How do financial leverage and supply chain finance influence firm performance? Evidence from construction sector

An Inferential Study on the Profitability Determinants of the Cement Industry in Bangladesh

Determinants of financial performance of listed firms manufacturing food products in Vietnam: regression analysis and Blinder–Oaxaca decomposition analysis

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