Abstract
Performance of Shariah and Non Shariah Compliance F&B Firms in Malaysia: Is there any Difference?
Highlights
Profitability can be described as an ability of a company to earn a profit
Except for total assets, the results of random effect model regression demonstrated that all independent factors, including quick ratio, debt ratio, tax rate, and tangibility, have a substantial impact on the return on asset (ROA) of Shariah compliance enterprises
There are three independent variables that are significant for Non Shariah Compliance in terms of return on asset: debt ratio, tax rate, and tangibility
Summary
Profitability can be described as an ability of a company to earn a profit. It can be measured in a various way by return on asset (ROA), but it can be return on equity (ROE) or net profit margin (NPM). Shahar (2015) discovered that debt ratio has no impact on Shariah compliant company performance based on return on asset (ROA) and return on equity (ROE), but short-term and long-term debt have a negative impact on Shariah compliant company performance based on market to book value (MTBV). Bashir et al (2013) investigated the elements that have a substantial impact on the success of Pakistani food companies Their findings from panel data revealed a positive relationship between total asset and company performance, implying that larger firms had more ability to boost production and more resources to improve sales, resulting in higher performance. The independent variables employed are quick ratio, debt ratio, total asset, tax rate and tangibility
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