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...

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Main Author: Chua, Chee Bing
Format: Thesis
Language:English
Published: 2014
Subjects:
Online Access:http://ir.unimas.my/id/eprint/9094/3/Chua%2C%20Chee%20Bing.pdf
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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
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