Factors influencing the financial performance of listed property companies in Malaysia

• Main Author: Sim, Khim Teing
• Format: Thesis
• Language: English; English; English; English
• Published: 2020
• Subjects: HG Finance
• Online Access: https://etd.uum.edu.my/10340/1/depositpermission-not%20alow_s823642.pdf; https://etd.uum.edu.my/10340/2/s823642_01.pdf; https://etd.uum.edu.my/10340/3/s823642_02.pdf; https://etd.uum.edu.my/10340/4/references_s823642.docx; https://etd.uum.edu.my/10340/

The research aims to examine the effect of leverage, firm size, asset growth (growth opportunities), and liquidity on the financial performance of listed property companies in Malaysia from 2005 until 2018. Firm performance is measured by return on assets (ROA), return on equity (ROE) and Tobin’s Q ratio. This research finds firm size, asset growth and liquidity (cash holdings) to be positive and significantly related to individual firms’ operating performance measured by ROA and ROE. These findings are consistent with the prediction of financial distress where firms that are larger in size, more liquid and experience greater growth opportunities are associated with higher operating profits. Leverage on the other hand is negative and significantly related to ROA and ROE. These findings are consistent with the prediction of trade-off theory where firm’s trade-off between the tax shield benefits and bankruptcy costs from using debt. Similarly, liquidity and asset growth variables are found to be positive and significantly related firm valuation measured by Tobin’s Q ratio. Interestingly, firm size and debt ratio are found to be negative and positively related to Tobin’s Q. These findings are contrary to the findings from ROA and ROE equations.