Abstract
Purpose: The purpose of the study was to analyze the impact of ROA and ROE on the net profit of the selected Oil and Gas companies (O & G) in Oman; to analyze the effect of ROA on the assets performances of selected Oil and Gas companies in Oman and to analyze the relationship between ROE and debt-equity on the performances of oil and gas companies in Oman. Design/methodology/approach: The secondary data was obtained from the annual reports of Oman's major telecom providers listed in the Muscat Securities Market (MSM) for the period 2015 to 2020. The data collected from the financial statements were analyzed using ratio analyses with the help of excel. The secondary data was obtained from the annual reports of selected O & G companies in Oman, listed in the Muscat Securities Market (MSM) for the period 2015 to 2020. The collected data was analyzed with financial ratio analysis using excel and SPSS to evaluate the financial performance of the companies. Findings: The study revealed that amongst the overall financial performances of the O & G companies, Oman Oil Marketing, Muscat Gases, and Shell Oman Marketing topped the list followed by National Gas and Al Maha Petroleum. The study also revealed that there is a correlation between Return of Assets (ROA) and Return on Equity (ROE), and Assets Turnover Ratio (ATO) and Net Profit Margin (NP). ROA, ROE, and Debt Equity Ratio (DE) do not have any correlation with NP which purports that there is no relationship between ROA & NP, ROE & NP, and DE & NP. Research limitations/implications: The study revealed that the financial performances of the O & G companies in Oman can be measured through analysis NP, ROE, ROA, ATO & DE but it is of no significance to the company’s financial performances as ROA, ROE has no impact on the Net profit margin of the O & G companies in Oman. Similarly, neither ATO nor DE has any impact on the net profit margin. Social implications: The study helps the investors and management of the O & G companies to understand the variables and the efforts to reform financial measures and take necessary action and suitable decisions to enhance the financial performances of the oil and gas companies. Originality/Value: The study was carried out with five major selected O & G companies of Oman and the study had relied mostly on quantitative techniques involving financial ratios and correlation analysis. The study can be extended to other oil-based economies countries as well.
Highlights
The Oil and Gas (O&G) sector is having a crucial role in the global economy
It could be observed that Al Maha ranked first, followed by Shell Oman Marketing and National Gas
The above result can be summarized as follows: Among the average Return on Equity (ROE), Oman Oil Marketing ranked first followed by Muscat Gases and National Gas
Summary
The Oil and Gas (O&G) sector is having a crucial role in the global economy. There is a need for the international O & G sector to measure their performance on how effectively they can achieve the objectives, in line with the shareholders’ expectations for sustainable growth of both companies and the countries Pock. In most oil-dependent countries, income is generated majorly from the taxpayer involved in the O & G industry-related businesses, and it becomes a must to ensure globally whether the companies operating within the O & G sector are performing well or not. The risks are attached to business operations, and the risk policies are meant to identify and remove such risks so that the achievement of prominent growth with profitability through the defined business operations is ensured. The high rate of risk in relates to financial aspects may affect
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