Measurement and Determinants of Financial Performance of Modaraba Companies: A Case Study of Pakistan
Purpose: Profitability measurement is a comparative statistic that describes the relationships between overall profit and other financial determinants of the firm. Design/Methodology/Approach: The focus of this study is to measure the technical (TE), pure technical (PTE) and scale efficiency (SE)...
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
CSRC Publishing
2021-06-01
|
| Series: | Journal of Accounting and Finance in Emerging Economies |
| Subjects: | |
| Online Access: | https://publishing.globalcsrc.org/ojs/index.php/jafee/article/view/1785 |
| _version_ | 1818790093838614528 |
|---|---|
| author | Qaisar Maqbool Khan Rehana Kouser |
| author_facet | Qaisar Maqbool Khan Rehana Kouser |
| author_sort | Qaisar Maqbool Khan |
| collection | DOAJ |
| description | Purpose: Profitability measurement is a comparative statistic that describes the relationships between overall profit and other financial determinants of the firm.
Design/Methodology/Approach: The focus of this study is to measure the technical (TE), pure technical (PTE) and scale efficiency (SE) scores via Data Envelopment Analysis (DEA) of modaraba companies operating in Pakistan. The next stage is to study the empirical relationship between profitability, liquidity, leverage, and macroeconomic performance drivers. Financial statement data for 2010 to 2019 have been analyzed.
Findings: Empirical findings of descriptive statistics, correlation and regression were measured. These empirical results reveal that capital ratio (CR) and operating expenses to net income (OENI) had negative correlation with PTE, SE and TE. Whereas the age of the firm had a negative correlation with PTE and TE and positive correlation with SE, moreover, exchange rate (EXC) PKR to USD, log of total assets (LTA) and management expenses (ME) had negative correlation with SE and positive correlation with PTE and TE. Furthermore, inflation (INF) had negative correlation with PTE and positive correlation with SE and TE. Moreover, number of certificates (NOC) had negative correlation with SE and TE and positive correlation with PTE.
Implications/Originality/Value: Findings will be helpful to the management and policy makers for enhancing future financial performance by concentrating on these economic factors. More detailed and extensive data from the financial and non-financial aspects is suggested to support the hypothesized relationship of efficiency measures and determinants. |
| first_indexed | 2024-12-18T14:49:59Z |
| format | Article |
| id | doaj.art-baf9910adfbf4339b857ada5eb79bdf6 |
| institution | Directory Open Access Journal |
| issn | 2519-0318 2518-8488 |
| language | English |
| last_indexed | 2024-12-18T14:49:59Z |
| publishDate | 2021-06-01 |
| publisher | CSRC Publishing |
| record_format | Article |
| series | Journal of Accounting and Finance in Emerging Economies |
| spelling | doaj.art-baf9910adfbf4339b857ada5eb79bdf62022-12-21T21:04:11ZengCSRC PublishingJournal of Accounting and Finance in Emerging Economies2519-03182518-84882021-06-0172Measurement and Determinants of Financial Performance of Modaraba Companies: A Case Study of PakistanQaisar Maqbool Khan0Rehana Kouser1PhD Scholar, Department of Commerce, Bahauddin Zakariya University, Multan, PakistanDepartment of Commerce, Bahauddin Zakariya University, Multan, PakistanPurpose: Profitability measurement is a comparative statistic that describes the relationships between overall profit and other financial determinants of the firm. Design/Methodology/Approach: The focus of this study is to measure the technical (TE), pure technical (PTE) and scale efficiency (SE) scores via Data Envelopment Analysis (DEA) of modaraba companies operating in Pakistan. The next stage is to study the empirical relationship between profitability, liquidity, leverage, and macroeconomic performance drivers. Financial statement data for 2010 to 2019 have been analyzed. Findings: Empirical findings of descriptive statistics, correlation and regression were measured. These empirical results reveal that capital ratio (CR) and operating expenses to net income (OENI) had negative correlation with PTE, SE and TE. Whereas the age of the firm had a negative correlation with PTE and TE and positive correlation with SE, moreover, exchange rate (EXC) PKR to USD, log of total assets (LTA) and management expenses (ME) had negative correlation with SE and positive correlation with PTE and TE. Furthermore, inflation (INF) had negative correlation with PTE and positive correlation with SE and TE. Moreover, number of certificates (NOC) had negative correlation with SE and TE and positive correlation with PTE. Implications/Originality/Value: Findings will be helpful to the management and policy makers for enhancing future financial performance by concentrating on these economic factors. More detailed and extensive data from the financial and non-financial aspects is suggested to support the hypothesized relationship of efficiency measures and determinants.https://publishing.globalcsrc.org/ojs/index.php/jafee/article/view/1785Modaraba CompaniesLiquidityLeverageProfitabilityFinancial Performance Determinants |
| spellingShingle | Qaisar Maqbool Khan Rehana Kouser Measurement and Determinants of Financial Performance of Modaraba Companies: A Case Study of Pakistan Journal of Accounting and Finance in Emerging Economies Modaraba Companies Liquidity Leverage Profitability Financial Performance Determinants |
| title | Measurement and Determinants of Financial Performance of Modaraba Companies: A Case Study of Pakistan |
| title_full | Measurement and Determinants of Financial Performance of Modaraba Companies: A Case Study of Pakistan |
| title_fullStr | Measurement and Determinants of Financial Performance of Modaraba Companies: A Case Study of Pakistan |
| title_full_unstemmed | Measurement and Determinants of Financial Performance of Modaraba Companies: A Case Study of Pakistan |
| title_short | Measurement and Determinants of Financial Performance of Modaraba Companies: A Case Study of Pakistan |
| title_sort | measurement and determinants of financial performance of modaraba companies a case study of pakistan |
| topic | Modaraba Companies Liquidity Leverage Profitability Financial Performance Determinants |
| url | https://publishing.globalcsrc.org/ojs/index.php/jafee/article/view/1785 |
| work_keys_str_mv | AT qaisarmaqboolkhan measurementanddeterminantsoffinancialperformanceofmodarabacompaniesacasestudyofpakistan AT rehanakouser measurementanddeterminantsoffinancialperformanceofmodarabacompaniesacasestudyofpakistan |