Analysis of Plantation Industry Profit and Liquidity Ratios in Malaysia

Abstract

Liquidity Ratio is the most important factor in a plantation company's success. The study examined how Malaysian plantation companies' ROA, ROE, and ROIC are affected by liquidity ratio. Thus, a cause-and-effect analysis is used to determine how the variables current ratio (CR), quick ratio (QR), and cash conversion cycle (CCC) affect return on assets (ROA), return on equity (ROE), and return on capital (ROIC). This study collects data from the Company's Financial Report. A company's financial status can be obtained from its financial reports, which can also be used for research. Company Financial Reports are secondary data. Liquidity ratios with Independent Variables Current Ratio (CR), Quick Ratio (QR), and Cash Conversion Cycle (CCC) are included. The profitability ratio of Return on Assets (ROA), Return on Equity (ROE), and Return on Invested Capital (ROIC) will be the dependent variable. Malaysian plantation companies' profitability is only affected by the quick ratio, according to the findings. This applies only to the quick ratio. The cash conversion cycle negatively impacts return on assets, return on investment capital, and return on investment margin. Despite its small impact, the quick ratio is also said to hurt Malaysian plantation companies' profitability. Discussed are the study's limitations and recommendations for future research.