IDEAS home Printed from https://ideas.repec.org/a/ids/amerfa/v2y2010i2p143-154.html
   My bibliography  Save this article

Evaluating company's performance using multiple discriminant analysis: the case of Shariah compliance companies

Author

Listed:
  • Nuradli Ridzwan Shah Mohd Dali
  • Hamdi Hakeim Mudasir
  • Suhaila Abdul Hamid

Abstract

There are many tools that can be used to measure/evaluate the performance of a company and one of the most popular tools is using the financial ratios. This paper will explore the use of a combination of two different techniques using the time series data of share and market prices collected from Shariah compliance companies and cross-sectional financial ratios data of Shariah compliance companies. Share prices from 201 Shariah compliance companies listed in the Bursa Malaysia stock exchange were collected from 2000 to 2005 with their respective 2005 financial ratios. The Jensen Alpha technique is employed to classify the Shariah compliance companies in the Main Board Bursa Malaysia into two categories, i.e. performing and non-performing. Next, multiple discriminant analysis (MDA) technique is employed in identifying the ratio(s) that significantly influence the performing and non-performing companies. The MDA result shows that shareholders fund/share or net tangible asset ratio could differentiate significantly the non-performing and performing Shariah compliance companies.

Suggested Citation

  • Nuradli Ridzwan Shah Mohd Dali & Hamdi Hakeim Mudasir & Suhaila Abdul Hamid, 2010. "Evaluating company's performance using multiple discriminant analysis: the case of Shariah compliance companies," American Journal of Finance and Accounting, Inderscience Enterprises Ltd, vol. 2(2), pages 143-154.
    • Handle: RePEc:ids:amerfa:v:2:y:2010:i:2:p:143-154
    as

    Download full text from publisher

    File URL: http://www.inderscience.com/link.php?id=37060
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ids:amerfa:v:2:y:2010:i:2:p:143-154. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sarah Parker (email available below). General contact details of provider: http://www.inderscience.com/browse/index.php?journalID=229 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.