An Examination of Assets Tangibility, Liquidity, Growth Opportunities, Size and Altman's Z-score on Firm's Profitability. | ||||
| المجلة العلمية للدراسات التجارية والبيئية | ||||
| Article 79, Volume 15, Issue 2, April 2024, Page 927-972 PDF (503.69 K) | ||||
| Document Type: المقالة الأصلية | ||||
| DOI: 10.21608/jces.2024.362047 | ||||
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| Authors | ||||
| Ola Mohamed El Mokadem* ; Khaled Gad* ; Nivene Sobhy* | ||||
| College of Management and Technology Accounting and Finance Department Arab Academy for Science, Technology & Maritime Transport | ||||
| Abstract | ||||
| This study analyzes and explains the various factors that affect the profitability of several companies in MENA Region in terms of return on assets (ROA), return on equity (ROE) and return on sales (ROES). The purpose of the study is to determine the impact of firm-specific factors on the profitability of firms in MENA Region, and to identify the most important factors that affect firm profitability. The study uses a cross-sectional analysis to analyze a total of 2331 observations. The data used in the study was collected from a data stream data database. The study uses a Pearson correlation and a multiple regression analysis to determine the factors that affect firms' profitability in MENA Region for 2007-2016. The statistical analysis showed a positive correlation between independent variables (liquidity, growth opportunity, asset tangibility, firm size, Altman’s Z-score), and firms’ profitability. The study suggests that in order to enhance the profitability of firms, it is important to focus on liquidity, growth opportunities, size, and Altman's Z-score. It is recommended that companies retain a significant portion of their annual profits to reinvest in additional investments and increase profitability. Additionally, it is advised to maintain a high level of tangible assets to perform better. Large companies should also take advantage of their size and strive to increase profitability. Furthermore, analysts should consider introducing new variables such as depreciation, age, and ownership concentration, and examine their impact on company profitability. It is also suggested to apply the same study to other companies or regions and compare the results with those of this study. The study suggests that in order to enhance the profitability of firms, it is important to focus on liquidity, growth opportunities, size, and Altman's Z-score. It is recommended that companies retain a significant portion of their annual profits to reinvest in additional investments and increase profitability. Additionally, it is advised to maintain a high level of tangible assets to perform better. Large companies should also take advantage of their size and strive to increase profitability. Furthermore, analysts should consider introducing new variables such as depreciation, age, and ownership concentration, and examine their impact on company profitability. It is also suggested to apply the same study to other companies or regions and compare the results with those of this study. | ||||
| Keywords | ||||
| liquidity; growth opportunities; assets tangibility; size; Altman's Z-score; profitability | ||||
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