MGT Assignment 2 1

1. Title
The Predictive Abilities of Financial Ratios in Predicting Listed Company Performance in Malaysia.
2. Objectives
1. To analyse the accuracy of financial ratios in predicting company performance.
2. To identify the effectiveness of financial ratios in predicting company performance.
3. To determine the impact of financial ratios in predicting company performance.
3. Hypothesis
1. To analyse the accuracy of financial ratios in predicting company performance.
Ho: The financial ratios in predicting company performance is inaccurate.
H1: The financial ratios in predicting company performance is accurate.

2. To identify the effectiveness of financial ratios in predicting company performance.
Ho: The financial ratios in predicting company performance is ineffective.
H1: The financial ratios in predicting company performance is effective.

3. To determine the impact of financial ratios in predicting company performance.
Ho: The financial ratios have low impact in predicting company performance.
H1: The financial ratios have high impact in predicting company performance.
4. Background of the Study
The performance of listed companies in Malaysia is determined by the financial ratios significantly. Major users of financial ratios are customers, suppliers, investors, managers, directors and other financiers. Financial ratios are reliable to be one of the standard of predicting company’s performance by determined the success or failure of the company.
Generally, there are numerous ways to evaluate the performance of an organization. It can be classified as two main areas which are financial measures and non-financial measures (Yap et al., 2011). Financial measures consist of any financial or accounting information which based on various numerical and statistical data that generated from day-to-day operation (Yap et al., 2011). With the provisions of these data, the profitability, liquidity, efficiency and stability of a firm can be determined accurately and clearly.

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