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Risk management practices and company performance: An empirical evidence from cement sector of Pakistan


Ali, Syed Atif and Hussin, Mohd Rasid (2016) Risk management practices and company performance: An empirical evidence from cement sector of Pakistan. Corporate Ownership and Control, 13 (2). ISSN 1727-9232

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Abstract

The study investigates the impact of risk management on the company performance.Degree of financial leverage (DFL), degree of operating leverage (DOL) and the working capital ratio (WCR) are taken as independent variables which are the representative of risk and the earning price per share (EPS), return on assets (ROA), return on equity (ROE), Sales and Net profits are taken as the representative of performance.Last 10 years (2004-2013) of Cement sector of Pakistan data is chosen as sample for analyze their relations by multiple regression technique.Results reveal that WCR impact adequately on the company performance because if company has enough liquidity than it perform its operations smoothly and enhance its performance very well.DFL should be control moderately because enough DFL leads performance of company downward. On the other hand, the DOL should be less because it causes the less profitability for the company from its operations.

Item Type: Article
Uncontrolled Keywords: Degree of Financial Leverage (DFL), Degree of Operating Leverage (DOL), Working Capital Ratio (WCR), Earning per Share (EPS), Return on Equity (ROE), Return on Assets (ROA)
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Divisions: School of Economics, Finance & Banking
Depositing User: Prof. Dr. Mohd Rasid Hussin
Date Deposited: 28 Jun 2016 07:30
Last Modified: 28 Jun 2016 07:30
URI: http://repo.uum.edu.my/id/eprint/18371

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