The effect of liquidity and solvency on profitability: the case of public-listed consumer product companies in Malaysia

The optimal level of liquidity and solvency has been one of the key financial components essential for a smooth operation, particularly in maintaining firm performance. Successful companies will normally manipulate the two closely interrelated financial elements; liquidity and debt structure to maxi...

Full description

Saved in:

Bibliographic Details
Main Author:	Md Yusoff, Hanaffie
Format:	Thesis
Language:	English English English
Published:	2017
Subjects:	HG4001-4285 Finance management Business finance Corporation finance
Online Access:	http://eprints.uthm.edu.my/785/1/24p%20HANAFFIE%20MD%20YUSOFF.pdf http://eprints.uthm.edu.my/785/2/HANAFFIE%20MD%20YUSOFF%20COPYRIGHT%20DECLARATION.pdf http://eprints.uthm.edu.my/785/3/HANAFFIE%20MD%20YUSOFF%20WATERMARK.pdf
Tags:	Add Tag No Tags, Be the first to tag this record!

id	my-uthm-ep.785
record_format	uketd_dc
spelling	my-uthm-ep.7852021-08-30T08:00:58Z The effect of liquidity and solvency on profitability: the case of public-listed consumer product companies in Malaysia 2017-06 Md Yusoff, Hanaffie HG4001-4285 Finance management. Business finance. Corporation finance The optimal level of liquidity and solvency has been one of the key financial components essential for a smooth operation, particularly in maintaining firm performance. Successful companies will normally manipulate the two closely interrelated financial elements; liquidity and debt structure to maximize the firm’s value as well for achieving an optimal hedging strategy. Subsequently a careful attention to these two elements will help companies to achieve a lower reduction in a bankruptcy costs and to reduce the likelihood of financial distress. The illiquidity problem, unless remedied, will lead to insolvency as the business liabilities exceed its assets. For larger organizations, maintaining a good level of liquidity can ensure the stability of the business. Thus, this study sought to examine the effect of liquidity and debt on the profitability among large firms in consumer product sector in Malaysia. In order to meet the objectives a quantitative panel data methodology was employed. The data were obtained from the audited financial statements of 116 firms in consumer product sector for the period of three years (2012 – 2015). The findings reveal that liquidity in term of quick ratio has positive and significant effect on profitability. While, current ratio has negative but insignificant effect on profitability. The result further reveals that solvency has no significant effect on profitability. The study recommends that the firms can improve their performance by increasing the level of liquidity and maintaining their optimal debt structure level. 2017-06 Thesis http://eprints.uthm.edu.my/785/ http://eprints.uthm.edu.my/785/1/24p%20HANAFFIE%20MD%20YUSOFF.pdf text en public http://eprints.uthm.edu.my/785/2/HANAFFIE%20MD%20YUSOFF%20COPYRIGHT%20DECLARATION.pdf text en staffonly http://eprints.uthm.edu.my/785/3/HANAFFIE%20MD%20YUSOFF%20WATERMARK.pdf text en validuser mphil masters Universiti Tun Hussein Onn Malaysia Fakulti Pengurusan Teknologi dan Perniagaan
institution	Universiti Tun Hussein Onn Malaysia
collection	UTHM Institutional Repository
language	English English English
topic	HG4001-4285 Finance management Business finance Corporation finance
spellingShingle	HG4001-4285 Finance management Business finance Corporation finance Md Yusoff, Hanaffie The effect of liquidity and solvency on profitability: the case of public-listed consumer product companies in Malaysia
description	The optimal level of liquidity and solvency has been one of the key financial components essential for a smooth operation, particularly in maintaining firm performance. Successful companies will normally manipulate the two closely interrelated financial elements; liquidity and debt structure to maximize the firm’s value as well for achieving an optimal hedging strategy. Subsequently a careful attention to these two elements will help companies to achieve a lower reduction in a bankruptcy costs and to reduce the likelihood of financial distress. The illiquidity problem, unless remedied, will lead to insolvency as the business liabilities exceed its assets. For larger organizations, maintaining a good level of liquidity can ensure the stability of the business. Thus, this study sought to examine the effect of liquidity and debt on the profitability among large firms in consumer product sector in Malaysia. In order to meet the objectives a quantitative panel data methodology was employed. The data were obtained from the audited financial statements of 116 firms in consumer product sector for the period of three years (2012 – 2015). The findings reveal that liquidity in term of quick ratio has positive and significant effect on profitability. While, current ratio has negative but insignificant effect on profitability. The result further reveals that solvency has no significant effect on profitability. The study recommends that the firms can improve their performance by increasing the level of liquidity and maintaining their optimal debt structure level.
format	Thesis
qualification_name	Master of Philosophy (M.Phil.)
qualification_level	Master's degree
author	Md Yusoff, Hanaffie
author_facet	Md Yusoff, Hanaffie
author_sort	Md Yusoff, Hanaffie
title	The effect of liquidity and solvency on profitability: the case of public-listed consumer product companies in Malaysia
title_short	The effect of liquidity and solvency on profitability: the case of public-listed consumer product companies in Malaysia
title_full	The effect of liquidity and solvency on profitability: the case of public-listed consumer product companies in Malaysia
title_fullStr	The effect of liquidity and solvency on profitability: the case of public-listed consumer product companies in Malaysia
title_full_unstemmed	The effect of liquidity and solvency on profitability: the case of public-listed consumer product companies in Malaysia
title_sort	effect of liquidity and solvency on profitability: the case of public-listed consumer product companies in malaysia
granting_institution	Universiti Tun Hussein Onn Malaysia
granting_department	Fakulti Pengurusan Teknologi dan Perniagaan
publishDate	2017
url	http://eprints.uthm.edu.my/785/1/24p%20HANAFFIE%20MD%20YUSOFF.pdf http://eprints.uthm.edu.my/785/2/HANAFFIE%20MD%20YUSOFF%20COPYRIGHT%20DECLARATION.pdf http://eprints.uthm.edu.my/785/3/HANAFFIE%20MD%20YUSOFF%20WATERMARK.pdf
_version_	1747830680707923968

The effect of liquidity and solvency on profitability: the case of public-listed consumer product companies in Malaysia

Similar Items