Financial Risk and Its Performance: A Study on Cocoaland Holdings Berhad in Malaysia

Abstract

Financial risks are everywhere, and it will affect the performance of a company. Every company should manage financial risks efficiently. The purpose of this study is to identify the financial risks associated with Cocoaland Holdings Berhad which is a food and beverages company and how it affects the performance of company for the period of 2014-2018. This study used multiple linear regression models to identify how independent variables influence the company performance. The results show that operating margin is the most significant variable that positively influence the performance of the company. The findings also reveal that quick ratio is significantly and negatively influence the performance of the company. This study suggests that Cocoaland Holdings Berhad should manage their operating margin by increasing the revenue or reducing the cost, and quick ratio by using cash to purchase inventory or assets in order to increase the performance and profitability of the company.

Keywords: Performance, Financial Risks, Operating Margin, Quick Ratio

JEL Classification: G32, E6