IDEAS home Printed from https://ideas.repec.org/a/eco/journ1/2017-02-12.html
   My bibliography  Save this article

The Relationship between Solvency Ratios and Profitability Ratios: Analytical Study in Food Industrial Companies listed in Amman Bursa

Author

Listed:
  • Abdul Aziz A. Abdul Rahman

    (Department of Finance and Accounting, College of Business Administration, Kingdom University, Kingdom of Bahrain.)

Abstract

This study aims to examine the relationship between solvency ratios and profitability ratios. The study was conducted on the food industrial companies listed in Amman Bursa during the period of 2012-2014. The results revealed no relationship between the following solvency ratios (debt/asset ratio, debt/equity ratio, long-term debt/assets ratio, long-term debt/equity ratio, and interest coverage) and the following profitability ratios (gross profit margin and operating cash flow margin). The results show negative relationship between both ratios of solvency (debt/asset ratio, debt/equity ratio) and the following profitability ratios (operating profit margin [OPM], net profit margin [NPM] and return on assets [ROA]). There are no relationships between the remaining of the solvency ratios (long-term debt ratios/assets, long-term debt ratios/equity, and interest coverage) and the following profitability ratios (OPM, NPM, and ROAs).

Suggested Citation

  • Abdul Aziz A. Abdul Rahman, 2017. "The Relationship between Solvency Ratios and Profitability Ratios: Analytical Study in Food Industrial Companies listed in Amman Bursa," International Journal of Economics and Financial Issues, Econjournals, vol. 7(2), pages 86-93.
    • Handle: RePEc:eco:journ1:2017-02-12
    as

    Download full text from publisher

    File URL: http://www.econjournals.com/index.php/ijefi/article/download/3960/pdf
    Download Restriction: no
    File URL: http://www.econjournals.com/index.php/ijefi/article/view/3960/pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sara Picas & Pedro Reis & António Pinto & José Luís Abrantes, 2021. "Does Tax, Financial, and Government Incentives Impact Long-Term Portuguese SMEs’ Sustainable Company Performance?," Sustainability, MDPI, vol. 13(21), pages 1-16, October.
    2. Samar Issa & Gulhan Bizel & Sharath Kumar Jagannathan & Sri Sarat Chaitanya Gollapalli, 2024. "A Comprehensive Approach to Bankruptcy Risk Evaluation in the Financial Industry," JRFM, MDPI, vol. 17(1), pages 1-22, January.
    3. Kyriazopoulos Georgios & Emiljan Mustaqe & Petropoulos Dimitrios, 2023. "Mergers and Acquisitions of Cooperative Banks. Before and After a Takeover. A Financial Analysis," Journal of Finance and Investment Analysis, SCIENPRESS Ltd, vol. 12(3), pages 1-1.

    More about this item

    Keywords

    Solvency Ratios; Profitability Ratios; Food Industrial Companies; Amman; Jordan;
    All these keywords.

    JEL classification:

    • M4 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting

    Statistics

    Access and download statistics

    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:eco:journ1:2017-02-12. 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: Ilhan Ozturk (email available below). General contact details of provider: http://www.econjournals.com .

    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.