Abstract
This paper aims to analysis the impact of financial and business risk on performance in ten industrial sector of Sultanate of Oman. The population is 47 firms from the period 2009 to 2013. The results indicate there is a statistical significant impact of earnings growth at business risk on performance at significant level 5% and current ratio and financial leverage at financial risk on performance at significant level 1%. The multiple regressions show there is a significant impact of all business and financial risk variables on performance at significant level 10%. The stepwise regression also shows that the financial risk related to current ratio variable between all independent variables is a significant impact on performance at significant level 1%. The researcher recommends to promotion exploit the political stability and strong relations with other countries to increase the size of international trade exchange and minimize the risk of investments and encourage local workforce in contributing to the gross domestic product and employment.
Highlights
The decision-making process of firms need the information to analysis all the problems that surround the firm, whether internal or external, and the investor needs information to evaluate the investments and often relies on the study of horizontal time series to interpretation the events of the future
The multiple regressions show there is a significant impact of all business and financial risk variables on performance at significant level 10%
There are two independent variables shows one of them financial risk that measured by two variables the financial leverage and current ratio and the high numbers is in pharmaceuticals sector as 1.864348 and Mining sector as 4.25 respectively, and low number is in cement sector as 0.249 and the engineering sector as 1 respectively
Summary
The decision-making process of firms need the information to analysis all the problems that surround the firm, whether internal or external, and the investor needs information to evaluate the investments and often relies on the study of horizontal time series to interpretation the events of the future. The financial statements constitute important data to the investor for adoption in the evaluation of investments through financial figures and analysis to clarify the firm’s image and financial position in the market. Risk is mean a difference between the actual event and expected as firms try to reduce the risk to a minimum through the prediction of the event and find strategic alternatives as the acceptance of a specific percentage of risk depends on the personal characteristics of the owners, for example, shareholders have the advantage to take the risk in accepting investment projects or reservation policy defensive investment projects to enter each of these strategies depends on the possibilities available to companies and financial strength (Raei, 2011)
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