Effect of the global financial crisis on the financial performance of public listed construction companies in Malaysia

Lai, Hui Ying; Aziz, Abdul Rashid Abdul; Chan, Toong-Khuan

doi:10.1108/jfmpc-02-2014-0002

Cited by 12 publications

(7 citation statements)

References 18 publications

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“…Generally, the most significant indicators of the performance of a company are profitability ratios, liquidity ratios and solvency ratios (Altman, 1968). However, in studying the performance of construction companies in Malaysia during the times of Global Financial Crisis (GFC), Lai et al (2014) had used several fundamental types of financial ratios, which includes profitability ratio, liquidity ratio, leverage ratio and cash flow ratio. From their study, it was found that these ratios are effective in assessing the financial performance of construction companies at a fair accuracy.…”

Section: Financial Ratio Analysismentioning

confidence: 99%

“…Financial ratio analysis had been coupled with the Z-score modelling method in order to gauge the financial performance of construction companies as per Lai et al (2014) to investigate the impact of external economic environments. Prior to their research, similar type of study was conducted to assess financial performance of construction companies in Malaysia in year 2013, which suggests that applying financial ratios analysis and Altman Z-score is useful in determining the financial distress level of a company (Alfan & Zakaria, 2013).…”

Section: Altman Z-score Modelmentioning

confidence: 99%

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Enduring the Financial Impacts of COVID-19: Property Developers in Malaysia

Hasnuden,

Mohdali

2023

IJARAFMS

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This paper aims to analyze the early financial implication of COVID-19 towards property development firms in Malaysia as well as discuss the actions taken and their effectiveness to ensure business continuity and to minimize the impact to the financials. A sequential exploratory mixed-methods research design was implemented in this study. Content analysis was adopted to analyze the quantitative and qualitative data of the quarterly and annual financial reports for thirty (30) public-listed property developers in Malaysia. Subsequently, an interview with a market research expert was conducted via Skype to provide possible explanation on the key findings from the financial reports. The Movement Control Order ("MCO") imposed by the Malaysia Government had cause several operational difficulties for the property developers. These negative impacts of COVID-19 were reflected in the declining financial performance of the property developers in year the 2 nd quarter of 2020. However, upon the actions taken by the management as well as the loosening of the MCO over time, developers' performance appeared to be improving as they were allowed to operate their business with certain Standard Operating Procedures (SOPs) to adhere. The actions taken were appeared to be effective in responding to the impacts of COVID-19. The findings of this study might not represent the actual financial impact of COVID-19 on the property developers because the smaller property developers in Malaysia were not included in this study. Furthermore, since the study was only focused for the year 2020, the full impact of COVID-19 to property development was not able to be assessed. It is proposed that the study may be reconducted to gauge on the overall impact of the COVID-19 pandemic, with the inclusion of the smaller property developers in Malaysia. Despite its limitation, this study provides input that relates to the impact of COVID-19 in this specific industry in Malaysia. This study recommends actions to be taken by management to ensure business continuity and minimize the impact of pandemic to the firms' financial performance, should similar pandemic arise again in the future.

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Section: Financial Ratio Analysismentioning

confidence: 99%

Section: Altman Z-score Modelmentioning

confidence: 99%

Enduring the Financial Impacts of COVID-19: Property Developers in Malaysia

Hasnuden,

Mohdali

2023

IJARAFMS

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“…Finally, the direct impact of the financial crisis was a reduction in profitability. The companies immediately responded to the crisis with more prudent financial management; curtailing expenses, cutting dividends, reducing bank borrowings, increasing equity; and to the extent of disposing of assets to mitigate losses (Ying Lai et al 2014).…”

Section: H2: Roe Is Positively Correlated With the Degree Of Debtsmentioning

confidence: 99%

The Impact of Economic Crisis on the Financial Performance of the European Companies

Madaleno

Bărbuță-Mișu

2019

ECO

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Financial-accounting information plays an important role in assessing and forecasting firms’ financial performance. But besides that, there are other external factors affecting the firm’s performance, such as the economic and financial crisis that causes imbalances over the economy and affect the business environment. Thus, based on financial statements data, in this paper, the determinants of financial performance are examined and also the impact of financial crisis on these factors is analysed using the fixed and random effects panel estimators. For this research it was used a sample of non-financial firms from European countries considering annual data from 2006 until 2015. The results achieved by panel data analysis show that crisis exerts a significant positive effect over financial performance as well as liquidity, assets turnover and labour productivity inducing that firms tend to do higher efforts to keep financial performance in face of a crisis. Financial performance is significantly and negatively influenced by leverage independently of the crisis effect showing that return on assets is lower than average interest rate.

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“…Even in a period of limited access to external funds, reducing dividends is still regarded as a particularly expensive source of funds for the company. Therefore, cash ratios are an important determinant in dividend policy both during and after the financial crisis (Lai et al, 2014;Attig et al, 2016). It is, therefore, hypothesised that:…”

Section: Introductionmentioning

confidence: 99%

Dividend Payout Policy and Global Financial Crisis: A Study on Malaysian Non-Financial Listed Companies

Chan

Boo²,

Ali³

2021

AJBA

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Manuscript type: Research paper Research aims: This paper examines the impact of the global financial crisis on Malaysia non-financial index firms’ dividend policies. Design/Methodology/Approach: This paper used panel data of 495 firm-year observations of Malaysian non-financial index firms from 2006 to 2016. Research findings: Our findings indicate that firms adjust their dividend policies during the pre-crisis and post-crisis periods; more profitable and larger firms are more likely to distribute their dividend payouts, whereas firms with higher leverage are more likely to omit their dividends. Moreover, dividend policies that will increase firms’ valuation are adopted in Malaysia. This is reflected in the signalling theory with evidence that higher profitability exerts a positive influence on firms’ propensity to increase and/or maintain dividends over different study periods, implying that markets attach a high valuation to firms that can pay, especially during the crisis period. We also find the role of catering theory and smoothing hypothesis lost relevance in both crisis and non-crisis periods. Thus, the catering theory and smoothing hypothesis were not supported in Malaysia. Theoretical contribution/Originality: This study investigates the impact of the global financial crisis on Malaysia non-financial index firms’ dividend policies. This paper suggestion can act as a catalyst to more comprehensive and detailed researches and studies on dividend policy in any economic landscapes. Practitioner/Policy implications: This paper may also guide companies on the structure and use of dividend distribution over the precrisis, during the crisis, and post-crisis periods. Research limitation/Implications: One limitation of the study is that the measures used for dividend payout determinants are only based on the theory investigated. These measures may not completely reflect all the payout determinants. Future research could address this limitation by employing other factors in the study of dividend policy such as inflation, economic growth, and corporate governance.

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Effect of the global financial crisis on the financial performance of public listed construction companies in Malaysia

Cited by 12 publications

References 18 publications

Enduring the Financial Impacts of COVID-19: Property Developers in Malaysia

Enduring the Financial Impacts of COVID-19: Property Developers in Malaysia

The Impact of Economic Crisis on the Financial Performance of the European Companies

Dividend Payout Policy and Global Financial Crisis: A Study on Malaysian Non-Financial Listed Companies

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