Financial ratio comparison analysis of manufacturing firms listed in stock exchange of Malaysia and Singapore

The objective of this study is to examine the performance of manufacturing sector between Malaysia and Singapore in different economic environment, culture, institutional, accounting standard and regulatory system. Ratio analyses that consist of ten different ratios were selected and calculated for all manufacturing firms of Malaysia and Singapore in the year of 2016 for comparison according to ratio category. Wilcoxon Sign Rank Test and Multivariate Regression Analysis were used for data analysis. The results show that there is a significant difference between the manufacturing firms of the two countries in terms of Current ratio, Quick ratio, Asset turnover ratio and Return on assets (ROA). The difference may be explained by the influences of different economic environment and institutional structure especially on the logistic management system practiced in both countries. The multivariate regression analysis indicates that the ROA of Malaysian manufacturing firms is significantly related to quick ratio, inventory turnover, receivable turnover and interest coverage ratio while the ROA of Singaporean manufacturing firms is significantly related to interest coverage ratio only. This study suggests future researchers to look at other neighboring countries such as Indonesia and Thailand and extend the sector scope instead of focusing on only one sector.