The Effect of Corporate Financial Performance on Growth Potential: Perspectives from the Listed Non-Financial Firms in Egypt Exchange

Document Type : Original Article

Authors

1 Arab Academy for Science Technology and Maritime Transport Graduate School of Business, Egypt

2 Arab Academy for Science, Technology and Maritime Transport, College of Management & Technology

3 Faculty of Business Administration and International Trade Misr International University

Abstract

This paper examines the effect of firm financial performance on growth potential for the non-financial firms listed in Egypt stock exchange. The annual data                  covers the years 2010 – 2020.  The total number of firms included in the study was 193 of non-financial firms listed in the Egyptian stock exchange (EGX). Overall, the results revealed that the robust determinants of firm growth                            potential are related only to (Cash ratio, inventory to current assets ratio), debt                   financing (long-term debt to total assets ratio, fixed assets to total debt ratio) and profitability (Net Operating Profits/Total Assets). Thus, there is a significant and positive association between the liquidity ratios, leverage ratios, and the firm growth potential. However, there is a negative and significant relationship                between dividends and age and the growth potential.

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