Abstract
This study reviews critically the performance of financial ratios in retail industry. The data obtained from OSIRIS database was analysed by Statistical Package for Social Sciences (SPSS) software version 22 (Test of normality, Kruskal-Wallis Test, Comparison of means, Correlation and Regression Analysis). Our main findings showed that retailing companies in Malaysia contribute high means value for ROCE, ROA, profit margin, current ratio, liquidity ratio, solvency ratio and number of employees. While Japan showed the highest means value of sales growth rate and USA showed high means value of ROE, market capitalization, number of shareholders, and number of subsidiaries over the period 2008-2012. The results support the first hypothesis which stated that, sales growth rate of retail companies in Japan is better than the USA. While, the results did not contribute to the second hypothesis, which stated that Japan and USA have a successful performance of financial ratios compared to Malaysia. Lastly, the results support our third hypothesis; the corporate variables influence the performance of financial ratios of the retailing companies.
Highlights
Retail is the sale of goods to end users, not for resale, but for use and consumption by the purchaser
The importance of profitability ratios is explored by defining the return on capital equity (ROE), return on assets (ROA), return on capital employed (ROCE), liquidity ratio, solvency ratio, current ratio and sales growth rate in the retailing industry, and it is quite interesting because the results will contribute into EVA in the future (Rayley & Benton, 2010)
The performance of the firms was analysed with respect to different perceptions by considering the data of profitability ratios, sales growth ratios and structures of the companies
Summary
Retail is the sale of goods to end users, not for resale, but for use and consumption by the purchaser. Many studies have been conducted to examine retailing of developing countries, the results varied significantly. The importance of profitability ratios is explored by defining the return on capital equity (ROE), return on assets (ROA), return on capital employed (ROCE), liquidity ratio, solvency ratio, current ratio and sales growth rate in the retailing industry, and it is quite interesting because the results will contribute into EVA in the future (Rayley & Benton, 2010). The evolving consumer in the near future will not be easy for retailers to understand or master. Consumers will increase their focus on purchasing products from socially responsible and “green friendly” manufacturers and retailers (PWC, 2015)
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