• Next, I will proceed with chapter 3 where I simply explain on the data and

methodology.
• The research framework of this research comprised with one DV and 4 IVs.
• The DV for this research to indicate the firm performance is ROA
meanwhile the IVs chosen for macroeconomic variables were GDP, ER, and
Inflation Rate and for liquidity ratio was CR.
• Next, the sampling of this research is based on 10 companies associated
with industrial product sector listed under Bursa Malaysia with 15 years
period.
• For the data, GDP is retrieved from DOSM, CPI from MEF, ER from Board of
Governors of the Federal Reserve System. And lastly, for both ROA and CR
were calculated from the companies’ annual report.
• Then, all the data collected is measured using correlation coefficient and
multiple regression on SPSS version 24.
• The research model can be simplified in the formula stated where X
represents all the IVs selected, ER, IR, GDP and CR. Then, the value of Y
that represents the DV, ROA can be estimated based on the selected value
of the IVs.
• Lastly, the research hypothesis can be proposed as stated. For
Relationship, H null (there is no relationship between macro variables and
Liquidity Ratio towards firm performance and for H one (there is a
relationship of each macro variables and Liquidity Ratio towards firm
performance).
• For impact, H null (there is no impact between macro variables and
Liquidity Ratio on firm performance and for H one (there is an impact
between each of macro variables and Liquidity Ratio on firm
performance).
• Then moving on to the next chapter, Chapter 4 that I will elucidate more on the
results and findings.
• First of all, due to the limited data that can be retrieved, this research is covering
only 10 companies where the data analysed covers a period of 15 years.
• For the correlation findings, positive and negative relationships can be found
between the IVs and DV at 10% significance level.
• First of all, there is a significant negative relationship between ER and ROA with -
14.2% with p value at 0.042.
• For GDP, insignificant relationship was found with ROA because the p-value is
0.171 higher than the significance level at 10%.
• There is a significant positive relationship between CPI and ROA with 16.3% and
the p-value is 0.023.
• Lastly, for CR, there is a significant positive relationship by 33.3% and p-value
0.000 at 10% significance level.
• Overall, the p value shows ER, CPI and CR are significant at 10% significant level
except for GDP.
• Next, the model summary shows that correlation coefficient, the R value is 40.6%
and the coefficient determination, R2 is 16.5%. This indicates, that only 16.5%
variance in ROA that can be explained by the macroeconomic variables and
liquidity ratio.
• Overall, the regression model indicates all the variables significantly influence
ROA at 90% confidence interval.
• Lastly, looking at the regression analysis on coefficients table, it examines that
most variables that give the most impact on firm performance by ROA.
• All variables are significant influence at 10% except for GDP that value 16.5%. It
indicates that GDP gives less impact on the firm performance.
• ER is found negatively correlated to firm performance while both CPI and CR are
positively correlated with ROA. To conclude, it found that firm performance is
influenced by ER, CPI and CR meanwhile GDP gives less influence.
• Therefore the regression model for this research can be explained as stated:
ROA= -0.0911-0.085ER + 0.996CPI + 1.387GDP + 0.364CR + error value
• Overall from the findings and results, CPI is found unexpectedly has a significant
positive relationship with DV, with 16.3% and p-value 0.023. Moreover, it also has
a significant influence on firm performance.
• It signifies that the higher the inflation measured using CPI, the better the firm
performance. Where the findings consistent with Aroldo and Zuhaib & Nizam.
• Aroldo investigated to determine the macro determinants of bank profitability in
Jamaica found that GDP and also inflation were positively related towards bank’s
profitability.
• For GDP, there is insignificant positive relationship with ROA, with p-value is 0.171
and give less impact on firm performance. This finding is consistent with Azila &
Faez (2014) and Adama & Apelete (2017).
• Where it suggests that firm performance of industrial product sector is not
influenced by GDP.
• Azila & Faez’s research is to examine the determinants of public based
construction companies’ profitability by using macro aspect variables, term
premium, interest rate and GDP and found non-significant relationship of all
variables.
• In conjunction with the hypothesis generated before, it can be
summarize in table stated: (read from the slides)
• Last but not least, we recommend for further study should be taken
to examine the relationship of macro variables and financial ratio on
firm productivity/performance.
• It can be carried out by using another available macro variables and
ratios and expand the year data longer up to 20 years or more and
using sample from another sector or on another countries. Lastly,
applying another model to run the data such as Logit Model, BCC
Model or EGLSM.
• THANK YOU.