Effects of Business Combination on Profitability, Market, Activity, Quick and Leverage Ratios Among Publicly Listed Corporations in the Philippines: A Corollary of Postnuptial Company Marriage

Authors

  • John Angel F. Dayego , Franco Raphael C. Fortun , Justine Earl P. Nasal , Jennica Mica F. Royo , Rodiel C. Ferrer

Abstract

With the continuous vying of companies due to advancements and modernization, several
industries nowadays engage in business combinations to expand their networks and procure competitive
advantages. Given the emerging relevance of business combinations, it became a wide topic of interest
having already established related literature of its different impacts on financial ratios. However, none of the
other studies have considered using other factors simultaneously such as company demographics as
moderating variables. This research was divided into three phases. It began with obtaining the 2000-2015
consolidated annual reports of the selected companies and then proceeds to the computation of the selected
financial ratios. Selected industries are involved such as food, agriculture, construction and housing,
retail, energy and other publicly listed corporations. The last phase was data analysis and this was done
through the use of the Structural Equation Model (SEM). Through the use of SEM, the researchers were able
to conclude that business combination has a direct relationship to the quick and asset turnover ratios of a
firm and that company size has a moderating effect on the relationship between business combination and
the quick and asset turnover ratio of a firm.

Published

2020-04-30

Issue

Section

Articles