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

Norma Nayan

MPRA Paper from University Library of Munich, Germany

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.

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. (search for similar items in EconPapers)
JEL-codes: D8 G3 G32 (search for similar items in EconPapers)
Date: 2017-04-16
New Economics Papers: this item is included in nep-mac, nep-rmg and nep-sea
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