Risk management practices and company performance: an empirical evidence from cement sector of Pakistan

Author:

Ali Syed AtifORCID,Hussin HJ Mohd RasidORCID

Abstract

The study investigates the impact of risk management on the company performance. Degree of financial leverage (DFL), degree of operating leverage (DOL) and the working capital ratio (WCR) are taken as independent variables which are the representative of risk and the earning price per share (EPS), return on assets (ROA), return on equity (ROE), Sales and Net profits are taken as the representative of performance. Last 10 years (2004-2013) of Cement sector of Pakistan data is chosen as sample for analyze their relations by multiple regression technique. Results reveal that WCR impact adequately on the company performance because if company has enough liquidity than it perform its operations smoothly and enhance its performance very well. DFL should be control moderately because enough DFL leads performance of company downward. On the other hand, the DOL should be less because it causes the less profitability for the company from its operations.

Publisher

Virtus Interpress

Subject

General Business, Management and Accounting

Reference14 articles.

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5. Hijazi, S. T., & Tariq, Y. B. (2006). Determinants of capital structure: a case for the Pakistani cement industry. The Lahore Journal of Economics, 11(1), 63-80.

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