Leveraging and corporate performance : evidence from Sarawak based public listed companies

Capital structure decision is vital that it would affect the corporate performance in terms of profitability and investment value. Leveraging, one of capital structure decision involves extending the company resources through external resources such as loans and borrowing, either for long term or s...

Full description

Saved in:

Bibliographic Details
Main Author:	Chua, Chee Bing
Format:	Thesis
Language:	English
Published:	2014
Subjects:	HD Industries Land use Labor HG Finance
Online Access:	http://ir.unimas.my/id/eprint/9094/3/Chua%2C%20Chee%20Bing.pdf
Tags:	Add Tag No Tags, Be the first to tag this record!

id	my-unimas-ir.9094
record_format	uketd_dc
spelling	my-unimas-ir.90942023-11-22T03:08:07Z Leveraging and corporate performance : evidence from Sarawak based public listed companies 2014 Chua, Chee Bing HD Industries. Land use. Labor HG Finance Capital structure decision is vital that it would affect the corporate performance in terms of profitability and investment value. Leveraging, one of capital structure decision involves extending the company resources through external resources such as loans and borrowing, either for long term or short term. Many financial advocates proposed that leveraging improves corporate performance by exploring the greater market opportunities, achieving economies of scale and producing better financial ratios in terms of valuation. However, theories may not always work in real life environment. This study takes on twenty five selected public listed companies in Bursa Malaysia which criteria to be Sarawak-based companies. Sarawak is indeed the best choice for study due to wide geographical and coverage areas, which basically push these companies to incur more costs to reach every corner of the market to excel in a competitive market condition. The relationship between leveraging and corporate performance is undertaken by using financial ratios as indicator, where correlation analysis is used to determine the relationship between independent variable (represented by Gearing Ratio) with dependent variables ( represented by ROA, ROE, PM and EPS ratio). The findings revealed that Gearing Ratio has significant positive negative with ROA, with the remaining relationship were insignificant. Further VI revelation indicated that Short Term Borrowing factored the positive relationship with both ROA and ROE. This suggests that these companies preferred external borrowing while preferring to commit in higher short term borrowing rates rather than tied up to long commitment. In reflect of negative impact of leveraging, we encourage companies to acquire funds internally or taking up long term borrowing to increase fund. Universiti Malaysia Sarawak, (UNIMAS) 2014 Thesis http://ir.unimas.my/id/eprint/9094/ http://ir.unimas.my/id/eprint/9094/3/Chua%2C%20Chee%20Bing.pdf text en validuser masters Universiti Malaysia Sarawak, (UNIMAS) Faculty of Economics and Business
institution	Universiti Malaysia Sarawak
collection	UNIMAS Institutional Repository
language	English
topic	HD Industries Land use Labor HG Finance
spellingShingle	HD Industries Land use Labor HG Finance Chua, Chee Bing Leveraging and corporate performance : evidence from Sarawak based public listed companies
description	Capital structure decision is vital that it would affect the corporate performance in terms of profitability and investment value. Leveraging, one of capital structure decision involves extending the company resources through external resources such as loans and borrowing, either for long term or short term. Many financial advocates proposed that leveraging improves corporate performance by exploring the greater market opportunities, achieving economies of scale and producing better financial ratios in terms of valuation. However, theories may not always work in real life environment. This study takes on twenty five selected public listed companies in Bursa Malaysia which criteria to be Sarawak-based companies. Sarawak is indeed the best choice for study due to wide geographical and coverage areas, which basically push these companies to incur more costs to reach every corner of the market to excel in a competitive market condition. The relationship between leveraging and corporate performance is undertaken by using financial ratios as indicator, where correlation analysis is used to determine the relationship between independent variable (represented by Gearing Ratio) with dependent variables ( represented by ROA, ROE, PM and EPS ratio). The findings revealed that Gearing Ratio has significant positive negative with ROA, with the remaining relationship were insignificant. Further VI revelation indicated that Short Term Borrowing factored the positive relationship with both ROA and ROE. This suggests that these companies preferred external borrowing while preferring to commit in higher short term borrowing rates rather than tied up to long commitment. In reflect of negative impact of leveraging, we encourage companies to acquire funds internally or taking up long term borrowing to increase fund.
format	Thesis
qualification_level	Master's degree
author	Chua, Chee Bing
author_facet	Chua, Chee Bing
author_sort	Chua, Chee Bing
title	Leveraging and corporate performance : evidence from Sarawak based public listed companies
title_short	Leveraging and corporate performance : evidence from Sarawak based public listed companies
title_full	Leveraging and corporate performance : evidence from Sarawak based public listed companies
title_fullStr	Leveraging and corporate performance : evidence from Sarawak based public listed companies
title_full_unstemmed	Leveraging and corporate performance : evidence from Sarawak based public listed companies
title_sort	leveraging and corporate performance : evidence from sarawak based public listed companies
granting_institution	Universiti Malaysia Sarawak, (UNIMAS)
granting_department	Faculty of Economics and Business
publishDate	2014
url	http://ir.unimas.my/id/eprint/9094/3/Chua%2C%20Chee%20Bing.pdf
_version_	1783728029596385280

Leveraging and corporate performance : evidence from Sarawak based public listed companies

Similar Items