1.0 TABLE OF CONTENT
CONTENT | PAGES |
2.0 THE ABSTRACT | 2 |
3.0 THE INTRODUCTION | 3 |
4.0 THE DISCUSSION | 4 |
5.0 THE CONCLUSION | 5 |
6.0 RECOMMENDATION | 6 |
7.0 REFERENCES | 8 |
2.0 THE ABSTRACT
This study was aim to assess the performance of Malaysian companies after suffering from a financial distress condition. Many companies post abnormal profits during their first few years, but the profits are not sustainable. So they face another restructuring petition or face winding up completely. To be able to show positive results after emergence, companies must improve their performance compared to previous financial results which led to downturn. The performance of companies emerging from a distress condition was assessed by the improvement of stock prices and other financial ratios that indicated the company is performing better compared to pre-bankruptcy period. The research methodology applies was conducted using secondary data. Financial data of the selected samples were extracted from the published annual reports obtained from the Bursa Malaysia's announcement section and the respective companies websites.
The results show that company performance (ROE, EBIT/TA, EPS), successful company reorganisation, and management change affect stock prices positively. Whereas, the performance of second distress condition companies affect stock price performance negatively.
3.0 THE INTRODUCTION
The problem is clearly stated that after asian financial crisis in 1997, Bank Negara Malaysia (BNM) could no longer defend the Malaysian Ringgit for the six month and the Malaysian Ringgit had devalued by almost 50%. Malaysia's stock market also decline of 54%. This problem caused massive restructuring in many Malaysian companies.
The problem is important because in Malaysia, private debt played a big role, principally by companies whose shares are listed for trading in Bursa Malaysia. This private debt can caused a distress to the banking system. Due to this problem, many companies will be listed as PN4 by...