SUMMARY
The sector of agriculture plays a significant role in boosting economic growth in many countries. Therefore, all firms’ annual reports must be analyzed for the purpose of comparing and establishing a benchmark. The objective of this study is to investigate the effect of application of financial ratios on firms’ financial performance. In order to achieve the purpose of the study, an econometric model is developed to estimate relationship among the variables by using multiple linear regression method. The data in this study is based on secondary data and collected from the audited financial statement of agriculture companies that listed on Iraqi Stock Exchange (ISX) over the period (2016-2020). The robust findings demonstrated that all independent variables quick ratio, current ratio and debt to assets ratio have positive and significant impact on financial performance. The most significance effect on firm performance is observed by current ratio and debt to assets ratio among the ratios that selected in this study.
XI. évf. 2023. SPECIAL ISSUE1 26-31
DOI: 10.24387/CI.2023.SPECIAL ISSUE.4
Cikk megtekintése http://controllerinfo.hu/wp-content/uploads/2023/12/ContrInf_beliv_kulonszam_2023-4.pdf
REFERENCES
AHMED, A. M. – NUGRAHA, D. P. – HÁGEN, I. (2023): The Relationship between Capital Structure and Firm Performance: The Moderating Role of Agency Cost. Risks, 11(6), 1–17. https://doi.org/https://doi.org/10.3390/risks11060102
AHMED, A. M. (2018): The Impact of Financial Statement Analysis on the Profitability Assessment (Applied Study of Kirkuk Company for Producing Constructional Materials). Studies and Scientific Researches. Economics Edition, 28: pp. 19-30. https://doi.org/10.29358/sceco.v0i28.417
AHMED, A. M. – MUHAMMED, A. A. (2018): Internal Control Systems and Its Relationships with the Financial Performance in “A Case Study of Asiacell” Studies and Scientific Researches. Economics Edition, 28: pp. 6–18. http://dx.doi.org/10.29358/sceco.v0i28.416
BANSAL, R. (2015): A Comparative Analysis of the Financial Performances of Selected Indian IT Companies During 2010-2014. The IUP Journal of Accounting Research & Audit Practices, 14(4): pp. 43-60.
BORHAN, H. – NAINA MOHAMED, R. – AZMI, N. (2014): The impact of financial ratios on the financial performance of a chemical company. World Journal of Entrepreneurship, Management and Sustainable Development, 10(2): pp. 154–160. https://doi.org/10.1108/wjemsd-07-2013-0041
BOSE, I. (2006): Deciding the financial health of dot-coms using rough sets. Information & Management, 43(7): pp. 835–846. https://doi.org/10.1016/j.im.2006.08.001
CENTRAL BANK OF IRAQ. (2020): Annual Statistical Bulletin. https://www.cbi.iq/
DELEN, D. – KUZEY, C. – UYAR, A. (2013): Measuring firm performance using financial ratios: A decision tree approach. Expert Systems with Applications, 40(10): pp. 3970–3983. https://doi.org/10.1016/j.eswa.2013.01.012
DRURY, C. (2008): Management & Cost Accounting (7th Edition). Cengage Learning.
EJOH, N. – EJOM, P. (2014): The Impact of Internal Control Activities on Financial Performance of Tertiary Institutions in Nigeria. Journal of Economics and Sustainable Development, 5(16): pp. 133–144.
FRANK, J. – LAMBERT, E. G. – QURESHI, H. (2017): Examining Police Officer Work Stress Using the Job Demands–Resources Model. Journal of Contemporary Criminal Justice, 33(4); pp. 348–367. https://doi.org/10.1177/1043986217724248
GALLIZO, J. L. – SALVADOR, M. (2003): Understanding the behavior of financial ratios: the adjustment process. Journal of Economics and Business, 55: pp. 267–283. https://doi.org/10.1016/S0148-6195(03)00022-5
GUJARATI, N. D. – PORTER, D. C. (2009): Basic Econometrics (5th Editio). McGraw-Hill Irwin.
HABIBI, A. – IQBAL, M. (2020): Benefits of Financial Ratios for Financing Sharia Banking Indonesia. Amwaluna: Jurnal Ekonomi Dan Keuangan Syariah, 5(1): pp. 1–12. https://doi.org/10.29313/amwaluna.v5i1.5299
INNOCENT, E. C. – MARY, O. I. – MATTHEW, O. M. (2013): Financial Ratio Analysis as a Determinant of Profitability in Nigerian Pharmaceutical Industry. International Journal of Business and Management, 8(8): pp. 107–117. https://doi.org/10.5539/ijbm.v8n8p107
KADIM, A. – SUNARDI, N. – HUSAIN, T. (2020): The modeling firm’s value based on financial ratios, intellectual capital and dividend policy. Accounting, 6(5): pp. 859–870. https://doi.org/10.5267/j.ac.2020.5.008
KUMBIRAI, M. – WEBB, R. (2010): A financial Ratio Analysis of Commercial Bank Performance in South Africa. African Review of Economics and Finance, 2(1): pp. 30–53.
PADACHI, K. (2006): Trends in Working Capital Management and its Impact on Firms’ Performance: An Analysis of Mauritian Small Manufacturing Firms. International Review of Business Research Papers, 2(2): pp. 45 -58.
RAMARATNAM, M. S. – JAYARAMAN, R. (2010): A Study on Measuring the Financial Soundness of Selected Firms with Special Reference to Indian Steel Industry-An Empirical View with Z-Score”. Asian Journal of Management Research, 1(1): pp. 724–735. https://doi.org/https://doi.org/10.1177/097324701100700307
SALEEM, Q. – REHMAN, R. (2011): Impacts of liquidity ratios on profitability (Case of oil and gas companies of Pakistan). Interdisciplinary Journal of Research in Business, 1(7), 95–98.
SCHMIDT, P. – MULLER, E. (1976): The Problem of Multicollinearity in A Multistage Causal Alienation Model: A Comparison of Ordinary Least Squares, Maximum-Likelihood and Ridge Estimators. Quality And Quantity, 12: pp. 267–297. https://doi.org/10.1007/BF00144234
TRACY, A. (2012): Ratio analysis fundamentals: how 17 financial ratios can allow you to analyze any business on the planet (2nd Edition). CreateSpace Independent Publishing Platform.
VALASKOVA, K. – KLIESTIK, T. – KOVACOVA, M. (2018): Management of financial risks in Slovak enterprises using regression analysis. Oeconomia Copernicana, 9(1): pp. 105–121. https://doi.org/10.24136/oc.2018.006
WANG, T. – CHEN, Y. (2006): Applying rough sets theory to corporate credit ratings. Paper presented at 2006 IEEE International Conference on Service Operations and Logistics, and Informatics, Shanghai, China, June 21–23: pp. 132–36.
WHITTINGTON, O. R. – PANY, K. (2001): Principles of auditing and other assurance services. Irwin/McGraw-Hill.
YOUSAF, M. – DEY, S. K. (2022): Best proxy to determine firm performance using financial ratios: A CHAID approach. Review of Economic Perspectives, 22(3): pp. 219–239. https://doi.org/10.2478/revecp-2022-0010
ZAINI, B. J. – MAHMUDDIN, M. (2019): Classifying firms’ performance using data mining approaches. International Journal of Supply Chain Management, 8(1): pp. 690–696.
