DETERMINANTS OF COMPANY PROFITABILITY IN MALAYSIAN AGRICULTURE SECTOR

Abstract

Malaysia agriculture sector contribute a small parts of country’s Gross Domestic Product compare to manufacturing sector. Since ‘80s, manufacturing sector blooming with rapid development in heavy industry and services sector which boosted the economy. Migration of agriculture worker that flocks the manufacturing sector makes the agriculture sector shrinking by years. The traditional ways of running the agriculture sector leads to poor production thus less income. The aim of this study is to examine the determinants of profitability in the agriculture sectors in Malaysia from 2017 to 2021. The profitability level of the firms is evaluated using four different variables which are liquidity, total debt, account receivable turnover and asset turnover. The present study gathered data on agriculture companies listed under Bursa Malaysia. The findings showed that the liquidity, total debt, account receivable turnover and asset turnover have a positive relationship with profitability. The study also found that liquidity has a statistically significant relationship with profitability while total debt, account receivable turnover and asset turnover do not have a statistically significant relationship with profitability. This finding provides a better understanding for agriculture sector to improve their financial performance and to have a better plan of their spending assets and liquidity. Therefore, it can help the agriculture sector to sustain and have recovery planning to prevent issues related to debt default payment in the future.