Determinants of profitability - A case study of oil and gas firms listed on Vietnam stock market

Abstract

The main objective of this study is to find out the potential impact of firm-specific factors and macroeconomic factors on profitability of oil and gas companies listed on the Vietnam Stock Exchange. This study uses panel data analysis techniques to investigate the determinants of profitability of 18 listed firms for 6 years period from 2009 to 2014. Secondary data used in this paper is obtained from various sources. The results reveal that profit margin, assets turnover ratio and firm size have positive and significant relationship with ROE and ROA. Leverage has strong negative impact on ROE and ROA. Current ratio has negative and insignificant relationship with ROE but positive and significant relationship with ROA. GDP growth and inflation rate have positive and insignificant relationship with ROE but strongly positive impact on ROA. Profitability is negatively affected by exchange rate fluctuation. Oil price fluctuation and sales growth have positive but insignificant relationship with ROE and ROA.