Assessing and evaluating financial performance of technology firms using DuPont model: Evidence from Malaysia

Abstract

This study aims to investigate the financial performance of technology firms in Malaysia by utilizing the DuPont model. Within the DuPont model framework, the return on equity (ROE) is used as the main component to measure the companys financial health. The ROE is breakdowns into its key components to predicts the individual influence of each factor. These elements are net profit margin (NPM), assets turnover (AT), and equity multiplier (EM). The findings of this study are based on the multiple linear regression analysis, whereas all three elements have positively and significantly influenced the ROE. The sample size of this study consists of 190 of technology companies in Malaysia and the research period span a decade, from 2013 to 2022. Through the analysis, this research goal is to enhance the understanding of financial performance in the technology sector.