LEVERAGE, LIQUIDITY AND PROFITABILITY RATIOS: ACCOUNTABILITY OF MALAYSIAN LISTED OIL AND GAS FIRMS

Abstract

Purpose: This study examines the impact of leverage and liquidity on the profitability among the listed O&G firms in Malaysia. Methodology: Data were gained from the audited financial statements of 22listed O&G firms for a period of ten years (2008 – 2017) and a quantitative data methodology was utilized to analyze the study. Main Findings: The findings demonstrated that leverage in terms of debt-equity ratio has a significant negative association on a firm's profitability. Nevertheless, liquidity ratios are found to be insignificantly related to the profitability of the O&G industry in Malaysia. Implications: This study contributes to raising awareness amongst the top management of firms, the analysts, and the investors in monitoring and forecasting for the firm's profitability and the value of the firms, thus contributing to the better investment decision making.