Determinants of Financial Performance in the Industrial Firms: Evidence from Jordan

Abstract

This paper investigates the factors affecting the financial performance of the Jordanian manufacturing industrial firms. Secondary data has been collected from the Amman stock exchange annual publication “Financial Statement Analysis of industrial firms listed in Amman Stock Exchange for the period 2005-2015. The data were gathered from the financial statements of industrial firms namely, balance sheet and income statement published by www.ase.com, the sample consists of (23) industrial firms. The researchers employed E.views software packages for the regression analysis of the current study. The dependent variable is firm’s performance measure ROA, the independent variables includes (LV, LQ, FS, PR, RV). The findings reveal that the variables of liquidity, profitability, and revenues are positively related with the return on assets (ROA). On the other hand, the variables of leverage and firm size are negatively related with it. In addition, the regression results show that all variables have significant impact on the financial performance. The findings are very important for different parties such as policy maker, investors, and stakeholders.