THE IMPACT OF INTANGIBLE FACTORS ON PROFITABILITY: EVIDENCE FROM CORPORATIONS TRADED AT MUSCAT SECURITIES MARKET IN OMAN
The objective of this paper is to determine whether corporate financial performance may be influenced from intangible assets owned by a company and some special incurring expenditures benefiting the intangible value of the company even though such items could also be technically expensed contrary to...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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Nicolaus Copernicus University in Toruń
2019-09-01
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| Series: | Copernican Journal of Finance & Accounting |
| Subjects: | |
| Online Access: | https://apcz.umk.pl/CJFA/article/view/21482 |
| _version_ | 1797706910331305984 |
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| author | Mike Onder Kaymaz Ilker Yilmaz Ozgur Kaymaz |
| author_facet | Mike Onder Kaymaz Ilker Yilmaz Ozgur Kaymaz |
| author_sort | Mike Onder Kaymaz |
| collection | DOAJ |
| description | The objective of this paper is to determine whether corporate financial performance may be influenced from intangible assets owned by a company and some special incurring expenditures benefiting the intangible value of the company even though such items could also be technically expensed contrary to getting capitalized. Combining the intangibles reported on the corporate balance sheets with the expenditures such as R&D, staff and advertising expenses, a variable called Calculated Value of Intangible Factors (CVIF) is specifically generated and is examined as to whether intangibles alone might potentially have a significant effect on corporate profitability ratios, and if so to what extent. The sample consists of non-financial public companies traded at Muscat Securities Market in Oman and the sampling period covers the time window from 2013 until 2017. Two regressors are used to capture the effect of intangible factors; meaning CVIF and CVIF/Total Assets (CVIFTA) respectively, the latter of which is a relative measure. Four (4) profitability measures, namely Gross Profit Margin (GPM), EBIT Margin (EBITM), Net Profit Margin (NPM) and Return on Assets (ROA) are developed as proxies to indicate for corporate financial performance. Considering all the resulting eight (8) models each, panel data regression analyses are performed separately to specifically document the linkage between corporate intangibles and corporate financial performance. Results provide a strong evidence by showing that intangibles do have a significant and a positive effect on corporate financial performance, except when ROA is regressed by CVIFTA rather than CVIF. This effect on and the linkage with financial performance is documented to be the most robust once GPM and NPM are to indicate the performance in the forms of CVIF and CVIFTA respectively. |
| first_indexed | 2024-03-12T05:59:23Z |
| format | Article |
| id | doaj.art-33e2774627a14ee08a94cc34baa2f79a |
| institution | Directory Open Access Journal |
| issn | 2300-1240 2300-3065 |
| language | English |
| last_indexed | 2024-03-12T05:59:23Z |
| publishDate | 2019-09-01 |
| publisher | Nicolaus Copernicus University in Toruń |
| record_format | Article |
| series | Copernican Journal of Finance & Accounting |
| spelling | doaj.art-33e2774627a14ee08a94cc34baa2f79a2023-09-03T04:18:03ZengNicolaus Copernicus University in ToruńCopernican Journal of Finance & Accounting2300-12402300-30652019-09-0182THE IMPACT OF INTANGIBLE FACTORS ON PROFITABILITY: EVIDENCE FROM CORPORATIONS TRADED AT MUSCAT SECURITIES MARKET IN OMANMike Onder Kaymaz0Ilker Yilmaz1Ozgur Kaymaz2Clarion UniversityDhofar UniversityTurkish AirlinesThe objective of this paper is to determine whether corporate financial performance may be influenced from intangible assets owned by a company and some special incurring expenditures benefiting the intangible value of the company even though such items could also be technically expensed contrary to getting capitalized. Combining the intangibles reported on the corporate balance sheets with the expenditures such as R&D, staff and advertising expenses, a variable called Calculated Value of Intangible Factors (CVIF) is specifically generated and is examined as to whether intangibles alone might potentially have a significant effect on corporate profitability ratios, and if so to what extent. The sample consists of non-financial public companies traded at Muscat Securities Market in Oman and the sampling period covers the time window from 2013 until 2017. Two regressors are used to capture the effect of intangible factors; meaning CVIF and CVIF/Total Assets (CVIFTA) respectively, the latter of which is a relative measure. Four (4) profitability measures, namely Gross Profit Margin (GPM), EBIT Margin (EBITM), Net Profit Margin (NPM) and Return on Assets (ROA) are developed as proxies to indicate for corporate financial performance. Considering all the resulting eight (8) models each, panel data regression analyses are performed separately to specifically document the linkage between corporate intangibles and corporate financial performance. Results provide a strong evidence by showing that intangibles do have a significant and a positive effect on corporate financial performance, except when ROA is regressed by CVIFTA rather than CVIF. This effect on and the linkage with financial performance is documented to be the most robust once GPM and NPM are to indicate the performance in the forms of CVIF and CVIFTA respectively.https://apcz.umk.pl/CJFA/article/view/21482IntangiblesFinancial PerformanceFinancial ReportingInternational Accounting Standards (IASs)International Financial Reporting Standards (IFRSs)Oman |
| spellingShingle | Mike Onder Kaymaz Ilker Yilmaz Ozgur Kaymaz THE IMPACT OF INTANGIBLE FACTORS ON PROFITABILITY: EVIDENCE FROM CORPORATIONS TRADED AT MUSCAT SECURITIES MARKET IN OMAN Copernican Journal of Finance & Accounting Intangibles Financial Performance Financial Reporting International Accounting Standards (IASs) International Financial Reporting Standards (IFRSs) Oman |
| title | THE IMPACT OF INTANGIBLE FACTORS ON PROFITABILITY: EVIDENCE FROM CORPORATIONS TRADED AT MUSCAT SECURITIES MARKET IN OMAN |
| title_full | THE IMPACT OF INTANGIBLE FACTORS ON PROFITABILITY: EVIDENCE FROM CORPORATIONS TRADED AT MUSCAT SECURITIES MARKET IN OMAN |
| title_fullStr | THE IMPACT OF INTANGIBLE FACTORS ON PROFITABILITY: EVIDENCE FROM CORPORATIONS TRADED AT MUSCAT SECURITIES MARKET IN OMAN |
| title_full_unstemmed | THE IMPACT OF INTANGIBLE FACTORS ON PROFITABILITY: EVIDENCE FROM CORPORATIONS TRADED AT MUSCAT SECURITIES MARKET IN OMAN |
| title_short | THE IMPACT OF INTANGIBLE FACTORS ON PROFITABILITY: EVIDENCE FROM CORPORATIONS TRADED AT MUSCAT SECURITIES MARKET IN OMAN |
| title_sort | impact of intangible factors on profitability evidence from corporations traded at muscat securities market in oman |
| topic | Intangibles Financial Performance Financial Reporting International Accounting Standards (IASs) International Financial Reporting Standards (IFRSs) Oman |
| url | https://apcz.umk.pl/CJFA/article/view/21482 |
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