INTERRELATIONSHIPS OF FINANCIAL PERFORMANCE AND MARKET VALUE FOR THE HEALTHCARE SECTOR LISTED IN BURSA MALAYSIA

Abstract

This study explores the interrelationships between financial performance and market value among healthcare companies listed on Bursa Malaysia. It aims is to examine how key financial metrics namely liquidity, financial leverage, asset efficiency, and operating profitability influence investor perceptions and consequently impact market value within the healthcare sector. The study focuses specifically on companies categorized under healthcare equipment and services, using data obtained from their annual reports from 2014 to 2023. Price to book value (PBV) is employed as the dependent variable representing market value, while the independent variables consist of current ratio (CR), debt equity ratio (DER), total assets turnover (TATO), and net profit margin (NPM), each reflecting distinct aspects of financial performance. Descriptive statistics, correlation analysis, and multiple linear regression analysis are utilized to examine the relationships among the variables. The regression results found that debt equity ratio and total aset turnover are positive significant with price to book value. These results highlight the role of financial leverage and aset efficiency in determining the healthcare firm value. The sensitivity analysis highlights the same conclusions. In conclusion, the study provides empirical evidence that specific financial indicators significantly affect the market value of healthcare companies in Malaysia, offering insights for financial decision-making and investment strategies within the healthcare sector.