Purpose -This study examines the intangible assets value of the Malaysian market. It measures the relationship between intangible assets and corporate market value of Malaysian firms and whether they are consistent with findings in other advanced markets. Design/methodology/approach -Firstly, the development of intangible assets of Malaysian companies over 2000 to 2006 were measured statistically using Landsman's balance sheet identity model. Then, cross-sectional multi-regression procedure was used to ascertain the relationship between intangible assets and financial performance. Findings -The findings reveal that the Malaysian market developed intangible assets at a rather slow pace, with significant development from year 2004 onwards. It also reveals that the book value of net assets (BVNA) are still dominant in Malaysian corporate valuation but this trend is declining as greater interest has now been developed in employing intangible assets and earnings as important variables. Furthermore, the results indicate that there is a positive trend in intangible assets development in Malaysia, consistent with those of advanced markets such as the US, Europe and Australia. However, the Malaysian market lags by about 20 years as compared to the more advanced ones.Research limitations/implications -The limitations of this paper are as follows: the time frame for this study was seven years and it looked at the post-financial crisis period. A longer time frame may be desirable covering both pre-and post-crisis periods. Secondly, this study did not look into intangible assets at the micro-level perspective. Unless solid definition, classification, measurement and valuation of intangible assets have been ascertained, it is not worth dwelling on individual assets, such as brand, research and development (R&D), and human capital. Originality/value -The main contribution of this study is that it provides empirical evidence that intangible assets or intellectual assets are strategic assets that require close attention in line with development of the knowledge-based economy.
This study attempts to predict financial distress companies in the consumer products sector in Malaysia using financial distress companies as the dependent variable and financial ratios as the independent variables. Logit Analysis was used as the analysis procedure because financial ratios do not have to be normal if it is used. It is also suitable when the dependent variable is binary in nature. Furthermore, it can also provide the probability of a company being financially distress. In addition, it can also provide us with the sign of the independent variable(s). This study found that the independent variables that can be used to predict financial distress companies in the consumer products sector in Malaysia were debt ratio, total assets turnover ratio and working capital ratio. The findings from the internal validation showed that the prediction model provided a more than 50% chance that the model is accurate for five years before distress. Furthermore, the findings from the external validation showed that the model might be able to be used outside the estimation time period because the overall percentage accuracy were higher than 50% for five years before distress.
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