 |
[email protected] |
 |
3275638434 |
 |
 |
| Paper Publishing WeChat |
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License
Effects of Assets Structure on the Financial Performance: Evidence From Sultanate of Oman
Mawih K. Al Ani
Full-Text PDF
XML 572 Views
DOI:10.17265/1548-6591/2014.02.007
Dhofar University, Salalah, Sultanate of Oman
The main objective of this study is to examine the effects of assets structure (fixed assets and current assets) on the financial performance of some manufacturing companies listed on Muscat Securities Market (MSM). The methodology of the study is content analysis of annual reports of a sample of 28 out of 70 (40%) companies for the period 2008-2012. The assets structure is measured by fixed assets turnover and current assets turnover while the financial performance is measured by return on assets (ROA) and return on equity (ROE). The study examines two main hypotheses. The first one examines the effects of total assets turnover on ROA whereas the second one examines the effects of total assets turnover on ROE. The overall result for the study is that the structure of assets does not have a strong impact on profitability in terms of ROE. This result means that if the structure of assets is changing then the ROA will not change. Another result of the study indicates that only the fixed assets have impact on ROE unlike ROA. Another result of the study suggests that the effect of asset structure has an impact on ROE only in petro-chemical sector.
assets structure, fixed assets turnover, current assets turnover, return on assets (ROA), return on equity (ROE)
Journal of US-China Public Administration, ISSN 1548-6591, February 2014, Vol. 11, No. 2, 170-179
Aguzzi, A., & Payne, C. (2007). Assets performance management drives mining profitability: Increasing coal production without significant capital investment. Retrieved from http://www.ivara.com/content/pdfs/Mining-Innovation-USCCG
Azadi, M. (2013). The relationship between changes in asset structure and operating earnings in the Tehran Stock Exchange (TSE). Trends in Advanced Science and Engineering (TASE), 7(1), 30-34.
Baker, H. K., & Powell, G. E. (2005). Understanding financial management: A practical guide.United Kingdom:Blackwell Publishing.
Campello, M., & Giambona, E. (2010). Asset tangibility and capital structure. Retrieved fromhttp://www.ebs.edu/fileadmin/ redakteur/ funkt.dept.../100323_Giambona.pdf
Demir, F. (2005). Determinants of manufacturing firm profitability under uncertainty and macroeconomic volatility: Evidence from an emerging market. Retrieved from http://www.ou.edu/cas/econ/wppdf/Determinants%20.pdf
Dhillon, A. S., & Vachhrajani, H. (2012). Impact of operational efficiency on overall profitability—A case study of GIPCL. Retrieved from http://amrita.edu/asb/pdfs/working paper
Dong, Y. L., Charles, K. Y., & Cai, D. (2012). What drives fixed asset holding and risk-adjusted performance of corporates in China? An empirical analysis. International Real Estate Review, 15(2), 141-164.
Financial Accounting Standards Board (FASB). (1985). Statement of financial accounting concepts No. 6, elements of financial statements.Retrieved from http://www.fasb.org/cs/BlobServer?blobcol=urldata&blobtable
Iqbal, A., & Mati, M. (2012). Relationship between non-current assets & firms profitability. Retrieved from http://mpra.ub. uni-muenchen.de/44132/MPRA
Ishmael, O., & Kehinde, J. S. (2013). Profitability analysis trend of components of current assets and their prospects in Ajaokuta iron industry. eCanadian Journal of Accounting and Finance, 1(2), 28-37. Retrieved from http://www.ecanadianjournals. com/index.php/journal-list?layout=edit&id
Jamali, A. H., & Asadi, A. (2012). Management efficiency and profitability in Indian automobile industry: From theory to practice. Indian Journal of Science and Technology, 5(5), 2779-2781.
Kantudu, A. S. (2008). Effect of profitability and total assets on the funded status of pension assets of quoted firms in Nigeria. Retrieved from http://ssrn.com/=1104845
Kotšina, S., & Hazak, A. (2012). Does investment intensity impact company profitability? A cross-country empirical study. Proceedings from the 2nd International Conference on Economics, Trade and Development IPEDR Vol. 36. IACSIT Press, Singapore.
Li, D. (2004). The implications of capital investments for future profitability and stock returns-an overinvestment perspective. Retrieved from http://bschool.nus.edu/departments/Finance and Accounting/ DonglinLi
Lzryadnova, O. (2013). Investments in fixed assets in February 2013. Retrieved from http://www.iep.ru/files/RePEc/gai/recdev/ 108Izryadnova.pdf
Muscat Securities Market. (2013). Financial statements of Omani manufacturing companies, annual reports 2008-2012. Muscat: Muscat Securities Market.
Okwo, I. M., Okelue, U. D., & Nweze, A. U. (2012). Investment in fixed assets and firm profitability: Evidence from the Nigerian brewery industry. European Journal of Business and Management, 4(20), 10-17.
Reyhani, A. G. (2012). The investigation of effect of assets structure on performance of accepted companies of Tehran Stock Exchange (TSE). Journal of Basic and Applied Scientific Research, 2(2), 1086-1090.