The relationship between financial leverage and liquidity, and firms' profitability of the agricultural industry: evidence from Malaysian listed firms / Muhamad Adhwa Zulkipli, Nik Anis Idayu Nik Abdullah and Amrizah Kamaluddin.
This study examined the relationship between financial leverage and liquidity with firms’ profitability of the Malaysian agricultural industry between 2011 to 2015. Additionally, the study attempted to examine the ability of both financial leverage and liquidity in predicting firms’ profitability. F...
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| Format: | Article |
| Language: | English |
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Accounting Research Institute (ARI) and UiTM Press, Universiti Teknologi MARA (UiTM) Shah Alam
2019
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| Subjects: | |
| Online Access: | https://ir.uitm.edu.my/id/eprint/29160/ |
| _version_ | 1848807169151991808 |
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| author | Zulkipli, Muhamad Adhwa Nik Abdullah, Nik Anis Idayu Kamaluddin, Amrizah |
| author_facet | Zulkipli, Muhamad Adhwa Nik Abdullah, Nik Anis Idayu Kamaluddin, Amrizah |
| author_sort | Zulkipli, Muhamad Adhwa |
| building | UiTM Institutional Repository |
| collection | Online Access |
| description | This study examined the relationship between financial leverage and liquidity with firms’ profitability of the Malaysian agricultural industry between 2011 to 2015. Additionally, the study attempted to examine the ability of both financial leverage and liquidity in predicting firms’ profitability. Financial ratios of 40 agriculturural firms’ that were listed in the Bursa Malaysia Main Board were taken as the sample. The selected variables for the study were Debt Equity Ratio (DTE), Interest Coverage Ratio (ICR), Proprietary Ratio (PR), Current Ratio (CuR), Quick Ratio (QR) and Cash Ratio (CsR) as the independent variables whilst Return on Capital Employed (ROCE) was the dependent variable. The study discovered that significant relationships exists between both financial leverage and liquidity and firm profitability. In addition, both financial leverage and liquidity are also significant to explain and predict firms profitability. The results confirm the trade-off theory, which suggests that firm profitability would increase as the level of debt increases, but only to an optimal level where any subsequent increment in the firms’ debt level upon reaching its optimal level would result in the contraction of its profitability. |
| first_indexed | 2025-11-14T22:38:33Z |
| format | Article |
| id | uitm-29160 |
| institution | Universiti Teknologi MARA |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-14T22:38:33Z |
| publishDate | 2019 |
| publisher | Accounting Research Institute (ARI) and UiTM Press, Universiti Teknologi MARA (UiTM) Shah Alam |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | uitm-291602020-04-07T07:31:37Z https://ir.uitm.edu.my/id/eprint/29160/ The relationship between financial leverage and liquidity, and firms' profitability of the agricultural industry: evidence from Malaysian listed firms / Muhamad Adhwa Zulkipli, Nik Anis Idayu Nik Abdullah and Amrizah Kamaluddin. apmaj Zulkipli, Muhamad Adhwa Nik Abdullah, Nik Anis Idayu Kamaluddin, Amrizah Economic development. Development economics. Economic growth Agricultural industries This study examined the relationship between financial leverage and liquidity with firms’ profitability of the Malaysian agricultural industry between 2011 to 2015. Additionally, the study attempted to examine the ability of both financial leverage and liquidity in predicting firms’ profitability. Financial ratios of 40 agriculturural firms’ that were listed in the Bursa Malaysia Main Board were taken as the sample. The selected variables for the study were Debt Equity Ratio (DTE), Interest Coverage Ratio (ICR), Proprietary Ratio (PR), Current Ratio (CuR), Quick Ratio (QR) and Cash Ratio (CsR) as the independent variables whilst Return on Capital Employed (ROCE) was the dependent variable. The study discovered that significant relationships exists between both financial leverage and liquidity and firm profitability. In addition, both financial leverage and liquidity are also significant to explain and predict firms profitability. The results confirm the trade-off theory, which suggests that firm profitability would increase as the level of debt increases, but only to an optimal level where any subsequent increment in the firms’ debt level upon reaching its optimal level would result in the contraction of its profitability. Accounting Research Institute (ARI) and UiTM Press, Universiti Teknologi MARA (UiTM) Shah Alam 2019-12 Article PeerReviewed text en https://ir.uitm.edu.my/id/eprint/29160/1/29160.pdf Zulkipli, Muhamad Adhwa and Nik Abdullah, Nik Anis Idayu and Kamaluddin, Amrizah (2019) The relationship between financial leverage and liquidity, and firms' profitability of the agricultural industry: evidence from Malaysian listed firms / Muhamad Adhwa Zulkipli, Nik Anis Idayu Nik Abdullah and Amrizah Kamaluddin. (2019) Asia-Pacific Management Accounting Journal (APMAJ) <https://ir.uitm.edu.my/view/publication/Asia-Pacific_Management_Accounting_Journal_=28APMAJ=29.html>, 14 (3). pp. 200-217. ISSN 2550-1631 https://apmaj.uitm.edu.my/ |
| spellingShingle | Economic development. Development economics. Economic growth Agricultural industries Zulkipli, Muhamad Adhwa Nik Abdullah, Nik Anis Idayu Kamaluddin, Amrizah The relationship between financial leverage and liquidity, and firms' profitability of the agricultural industry: evidence from Malaysian listed firms / Muhamad Adhwa Zulkipli, Nik Anis Idayu Nik Abdullah and Amrizah Kamaluddin. |
| title | The relationship between financial leverage and liquidity, and firms' profitability of the agricultural industry: evidence from Malaysian listed firms / Muhamad Adhwa Zulkipli, Nik Anis Idayu Nik Abdullah and Amrizah Kamaluddin. |
| title_full | The relationship between financial leverage and liquidity, and firms' profitability of the agricultural industry: evidence from Malaysian listed firms / Muhamad Adhwa Zulkipli, Nik Anis Idayu Nik Abdullah and Amrizah Kamaluddin. |
| title_fullStr | The relationship between financial leverage and liquidity, and firms' profitability of the agricultural industry: evidence from Malaysian listed firms / Muhamad Adhwa Zulkipli, Nik Anis Idayu Nik Abdullah and Amrizah Kamaluddin. |
| title_full_unstemmed | The relationship between financial leverage and liquidity, and firms' profitability of the agricultural industry: evidence from Malaysian listed firms / Muhamad Adhwa Zulkipli, Nik Anis Idayu Nik Abdullah and Amrizah Kamaluddin. |
| title_short | The relationship between financial leverage and liquidity, and firms' profitability of the agricultural industry: evidence from Malaysian listed firms / Muhamad Adhwa Zulkipli, Nik Anis Idayu Nik Abdullah and Amrizah Kamaluddin. |
| title_sort | relationship between financial leverage and liquidity, and firms' profitability of the agricultural industry: evidence from malaysian listed firms / muhamad adhwa zulkipli, nik anis idayu nik abdullah and amrizah kamaluddin. |
| topic | Economic development. Development economics. Economic growth Agricultural industries |
| url | https://ir.uitm.edu.my/id/eprint/29160/ https://ir.uitm.edu.my/id/eprint/29160/ |