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Influence of Profitability to the Firm Value of Diversified Companies in the Philippines

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  • William Sucuahi
  • Jay Mark Cambarihan

Abstract

The main objective of every company is to maximize the assets or firm value. Maximizing firm value is essential for a company because it means increasing the wealth of shareholders as well. This study aims to determine if there is significant influence between the company’s profile such as industry, company age and its profitability with the firm value using Tobin’s Q model. The proponents selected 86 diversified companies in the Philippines by gathering and analyzing annual financial reports on 2014 in the Philippine Stock Exchange (PSE) to obtain the objective of the study and also employed predictive correlational design. Frequency, Mean and Multiple Regression were used to determine the significant influence between the independent and dependent variables. The multiple regression reveals that of the three factors assumed to influence value of the firm using the Tobin’s Q, only profitability shows significant positive impact on the firm’s value.

Suggested Citation

  • William Sucuahi & Jay Mark Cambarihan, 2016. "Influence of Profitability to the Firm Value of Diversified Companies in the Philippines," Accounting and Finance Research, Sciedu Press, vol. 5(2), pages 149-149, May.
    • Handle: RePEc:jfr:afr111:v:5:y:2016:i:2:p:149
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    References listed on IDEAS

    as
    1. Allayannis, George & Weston, James P, 2001. "The Use of Foreign Currency Derivatives and Firm Market Value," The Review of Financial Studies, Society for Financial Studies, vol. 14(1), pages 243-276.
    2. Tobin, James, 1969. "A General Equilibrium Approach to Monetary Theory," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 1(1), pages 15-29, February.
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    Cited by:

    1. Tri Alpiani & Sutrisno, 2020. "The Effect of Board Structure on Firm Value with Profitability as an Intervening Variable," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 7(12), pages 68-77, December.
    2. Komath, Muhammed Aslam Chelery & Doğan, Murat & Sayılır, Özlem, 2023. "Impact of corporate governance and related controversies on the market value of banks," Research in International Business and Finance, Elsevier, vol. 65(C).
    3. Zhou, Hui & Nagayasu, Jun, 2023. "Is corporate environmental responsibility more valuable in the transitory period? The moderating effect of ownership type," Finance Research Letters, Elsevier, vol. 53(C).
    4. Zaroug Othman Mohammed & Mawih Kareem Al Ani, 2020. "The Effect of Intangible Assets, Financial Performance and Financial Policies on the Firm Value: Evidence from Omani Industrial Sector," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 14(3), September.
    5. Putri, Indah Ayu Johanda, 2023. "Growth, Intellectual Capital, Financial Performance And Firm Value : Evidence From Indonesia Automotive Firms," OSF Preprints z53mf, Center for Open Science.
    6. Ajaya Kumar Panda & Swagatika Nanda & Apoorva Hegde & Rashmi Ranjan Paital, 2024. "Revisiting the Drivers of Firm Value; An Empirical Investigation on Manufacturing Firms," Business Perspectives and Research, , vol. 12(3), pages 382-399, July.
    7. Mutambara Tatenda Emmanuel & Nyatanga Phocenah & McCullough Kerry, 2023. "The Impact of Working Capital and Macroeconomic Variables on the Profitability of Listed Industrial Firms in South Africa," International Journal of Economics and Financial Issues, Econjournals, vol. 13(5), pages 32-42, September.

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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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