Title: Performance evaluation of some listed companies: insights from Dhaka Stock Exchange in Bangladesh
Authors: S.M. Masudur Rahman; Abu Naser Mohammad Saif
Addresses: Department of Finance, Faculty of Business Studies, University of Rajshahi, Bangladesh ' School of Business and Economics, Universiti Putra Malaysia, 43400 UPM Serdang, Selangor, Malaysia; Department of Management Information Systems, Faculty of Business Studies, University of Dhaka, Bangladesh
Abstract: The present study unveils the key determinants of profitability that is the measure of performance for a company. The profitability measurement indicators ROA, ROE have been set as dependent variables, and macroeconomic factors like GDP, inflation, and company determinants like total asset, capital adequacy, net revenue margin, and the liquidity are set as independent variables. Natural log has been taken for total asset, GDP, and inflation as we considered the percentage change of the variables. It is found that in the case of ROA, four independent variables have a significant impact on ROA, but all are company determinants, no macroeconomic indicators have a remarkable influence on ROA. And in the case of ROE, it is revealed that only two variables, total asset, and GDP are meaningful and all other independent variables are insignificant. So, from the ROE side, it is found that NRM, liquidity, and capital adequacy are not significant variables. But for ROA, only two variables (GDP, inflation) are not significant. R2 is also higher for ROA (.8327) than R square for ROE (.1481).
Keywords: return on assets; ROA; return on equity; ROE; asset size; capital adequacy; liquidity; net revenue margin; NRM; gross domestic product; GDP; inflation.
Global Business and Economics Review, 2021 Vol.24 No.3, pp.261 - 278
Received: 16 Jul 2020
Accepted: 05 Oct 2020
Published online: 29 Apr 2021 *