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Performance and Risk: Empirical Evidence from Petroliam Nasional Berhad (PETRONAS)

Author

Listed:
  • Nayan, Norma

Abstract

The paper aims to recognize the relationship between risk and profit in the company Petroliam Nasional Berhad (PETRONAS). This company is one of the leading companies in oil and gas industry, therefore, knowing the risk taken by the company and their management and the impact on the profit to the shareholder. The main focus in this paper is to recognized risk especially in operational risk, liquidity risk and credit risk while the profit is indicate by using ROA, ROE, Profit Margin Ratio, Debt to Equity Ratio, Debt to Asset Ratio and Interest Coverage Ratio. In addition, the size of the company is considered to have relationship with the risk factor. It involved the total assets and the Malaysian economic outlook looking at the GDP growth, inflation, exchange rate and the unemployment. In addition, Pearson correlation coefficient and significant (1-tailed) are used to find the relationship between the ROA and the 13 items that be as independent variables. The ROE and Profit Margin Ratio are significant in this business due to the direct and indirect relationship to the profitability in the company. In conclusion, this paper takes further examines if the company has taken the appropriate decision in retaining the risk as mention that will reflected to the profitability and the growth of the company.

Suggested Citation

  • Nayan, Norma, 2017. "Performance and Risk: Empirical Evidence from Petroliam Nasional Berhad (PETRONAS)," MPRA Paper 78344, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:78344
    as

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    References listed on IDEAS

    as
    1. Waeibrorheem Waemustafa & Azrul Abdullah, 2015. "Mode of Islamic Bank Financing: Does Effectiveness of Shariah Supervisory Board Matter?," Post-Print halshs-01509026, HAL.
    2. Waeibrorheem Waemustafa & Suriani Sukri, 2016. "Systematic and Unsystematic Risk Determinants of Liquidity Risk Between Islamic and Conventional Banks," International Journal of Economics and Financial Issues, Econjournals, vol. 6(4), pages 1321-1327.
    3. Waeibrorheem Waemustafa & Suriani Sukri, 2015. "Bank Specific and Macroeconomics Dynamic Determinants of Credit Risk in Islamic Banks and Conventional Banks," International Journal of Economics and Financial Issues, Econjournals, vol. 5(2), pages 476-481.
    4. Steven Toms, 2010. "Value, profit and risk: accounting and the resource‐based view of the firm," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 23(5), pages 647-670, June.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Keywords: company performance; operational risk; liquidity risk and credit risk; return on asset; return on equity; profit margin ratio; debt to equity ratio; current ratio; quick ratio; cash ratio; interest coverage ratio; GDP; inflation; exchange rate; unemployment.;
    All these keywords.

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • G3 - Financial Economics - - Corporate Finance and Governance
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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