Debts and profitability, an examination of manufacturing firms listed on vietnam stock exchange , luận văn thạc sĩ

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business TRUONG HANH DUYEN DEBTS AND PROFITABILITY AN EXAMINATION OF MANUFACTURING FIRMS LISTED ON VIETNAM STOCK EXCHANGE MASTER OF BUSINESS (Honours) SUPERVISOR: Dr PHAM QUOC HUNG Ho Chi Minh City – Year 2012 Debts & Profitability: An examination of manufacturing firms listed in Vietnam TABLE OF CONTENT Acknowledgement Abstract CHAPTER 1: INTRODUCTION 1.1 1.2 1.3 1.4 Vietnam Context: Manufacturing firms in Vietnam: Research Objective: Research structure: 10 CHAPTER 2: LITERATURE REVIEW 11 2.1 The concept of debts: 11 2.2 The concept of profitability: .12 2.3 Relationship between debts and profitability: 14 2.4 Theoretical Framework: 17 2.5 Hypotheses Development: 18 CHAPTER 3: RESEARCH METHODOLOGY .20 3.1 Research Design: 20 3.2 Variables Definition: 21 3.3 Samples Collection: .22 3.4 Methods of Data Analysis: 24 CHAPTER 4: EMPIRICAL RESULTS & DISCUSSION 26 CHAPTER 5: IMPLICATIONS & CONCLUSIONS .30 5.1 Implication: 30 5.2 Limitation: 31 5.3 Conclusion: 32 References 33 Appendix 1: Outliners 36 Appendix 2: Normality and Heteroskedasticity 37 Appendix 3: MLR between Net margin and independent variables 39 Appendix 4: MLR between ROE and independent variables 42 By Truong Hanh Duyen – Mbus of 44 Debts & Profitability: An examination of manufacturing firms listed in Vietnam Acknowledgement I would like to gratefully acknowledge the enthusiastic supervision of Dr Pham Quoc Hung during this work I thank Prof Nguyen Dinh Tho for the technical discussions on the spectral response model, optical measurements and relevant discussions Staff of International School of Business (ISB) – University of Economy Ho Chi Minh is thanked for numerous supports I am grateful to all my friends and classmates from Mbus – ISB for sharing science materials and knowledge during the years I study there and for their continued moral support there after From the staff, Mr Duong Minh Toan and Mr Ho Sze Ming are especially thanked for their care and attention Finally, I am forever indebted to my husband for his understanding, endless patience and encouragement when it was most required By Truong Hanh Duyen – Mbus of 44 Debts & Profitability: An examination of manufacturing firms listed in Vietnam Abstract The ability of companies in determining suitable financial policies to make investment opportunities is one of the most principal factors for the companies’ growth and progression Adopting a debt policy or a capital structure is considered as a momentous decision that influences the companies’ value The determination of a company’s capital structure constitutes a difficult decision, one that involves several and antagonistic factors, such as risk and profitability That decision becomes even more difficult, in times when the economic environment in which the company operates presents a high degree of instability Therefore, the choice among the ideal proportion of debt and other resources can affect the value of the company, as much as the return rates can In this study, I tried to examine the influence of debts from Vietnam manufacturing firms regarding the factor profitability The necessary data, which are used in this work are the consecutive years’ financial reports provided by the 200 respective firms The Ordinary Least Squares (OLS) method was employed in the estimation of a function relating the net margin and return on the equity (ROE) with the indexes of long-term, short-term and total debts, and also with the total of owner’s equity The results indicate that short-term debt presents a negative impact on net margin The study recommends that managers should be careful while using short term debts as a source of finance By Truong Hanh Duyen – Mbus of 44 Debts & Profitability: An examination of manufacturing firms listed in Vietnam CHAPTER 1: INTRODUCTION This chapter includes three sections The first section introduces Vietnam Context in recent years, which is also the background of the research The second is some briefs of manufacturing firms in Vietnam and its vital role in the whole economy, thus the research is to focus on this sector The third section goes straightly to research objective as a conclusion for two sections above and an opening for following chapters 1.1 Vietnam Context: Vietnam’s transition, from a centrally planned economy to a market economy and from an extremely poor country to a lower-middle-income country in less than 20 years, is now a case study in many development textbooks But Vietnam’s other transition, to becoming an industrialized and modern economy by 2020, has barely begun The latest SocioEconomic Development Strategy (2011-2020) goes on to identify the country’s key priorities to meet this ambitious target: stabilize the economy, build world-class infrastructure, create a skilled labor force, and strengthen market-based institutions Meeting these aspirations will not be easy The country has experienced bouts of macroeconomic turbulence in recent years: double-digit inflation, depreciating currency, capital flight, and loss of international reserves eroding investor confidence Rapid growth has revealed new structural problems The quality and sustainability of growth remain a source of concern, given the resource-intensive pattern of growth, high levels of environmental degradation, lack of diversification and value addition in exports, and the declining contribution of productivity to growth Vietnam’s competitiveness is under threat because power generation has not kept pace with demand, logistical costs and real estate prices have climbed, and skill shortages are becoming more widespread Until a few years ago, Vietnam was one of the world's hottest emerging markets Now it faces an urgent task: fix a beleaguered banking system or watch its economy continue to slip behind faster-growing neighbors Piles of bad loans following the financial crisis have dragged down growth in Vietnam and left banks weakened and reluctant to lend, lending interest rate sometimes climbed up to exceedingly 21% per annually in crisis period Economists warn that Vietnam has entered a dangerous cycle where banks, By Truong Hanh Duyen – Mbus of 44 Debts & Profitability: An examination of manufacturing firms listed in Vietnam saddled with bad debts, are unwilling to lend, making it harder for businesses to invest That feeds into slower growth, which in turn makes it harder for companies to pay back loans, again harming the banks In a report of government in July 2012, from early 2012 Vietnam recorded about 30,000 of firms are in financials difficulties, temporarily stopping business and declaring bankruptcy 1.2 Manufacturing firms in Vietnam: Vietnam’s manufacturing sector grew at a compound annual growth rate (CAGR) of 9.3 percent from 2005 to 2010, and labor productivity in the sector increased at 3.1 percent a year Because this sector accounts for around 30 percent of overall GDP, this rapid growth made a substantial contribution to Vietnam’s expansion during this period Within manufacturing, some subsectors performed especially well Motor vehicle production grew at an annual rate of 16 percent during these five years, ready-made clothes by 12.9 percent, and electrical equipment by 12.0 percent The manufacturing industry plays a vital role in Vietnam’s economy by providing employment opportunities and accelerating its growth Simultaneously, liberalization, removal of investment restrictions, and semi-privatization of the economy have greatly boosted the country's industrial growth rate The main manufacturing sectors in Vietnam are textiles and garments, food and beverages and leather and wood The Government has implemented various programs to transform Vietnam’s economic structure from agriculture-driven to industry-driven and reduce its import dependency The development of export processing and industrial zones is just one of the initiatives that bolstered the country's industrial growth The Government has also offered incentives to investors in social sectors such as health and education However, since liberalization, the Governments share in the overall industrial investment has been declining, thereby enabling higher participation of private and foreign companies Financial and R&D (research and development) support, as well as the allotment of land in industrial zones, are likely to encourage stakeholders in the manufacturing industry to increase their investments While sectors such as textiles, leather, food and beverages, automobiles, chemicals and energy were resilient even during the economic downturn, a booming food processing sector, an unsaturated pharmaceuticals market and a dynamic By Truong Hanh Duyen – Mbus of 44 Debts & Profitability: An examination of manufacturing firms listed in Vietnam garments sector are expected to add value to the industrial production in Vietnam The Government has retained the majority of the stake in energy, finance, banking and telecom and shielded the agriculture, food and automobiles sectors from international competition Higher private and foreign investment had enhanced the growth rate of sectors such as transportation, real estate, communication and mining However, the country does not permit foreign investments in national defense, security, and health and it places conditional restrictions on investments in telecommunications, postal network and airports The Vietnamese Governments initiatives and specific incentives for the industrial sector are likely to increase exports and drive the economic growth Liberalization and the removal of various restrictions generating sector-specific investment opportunities are expected to attract more private and foreign participants to manufacturing industry Overall, with an aim to become industrialized country by 2020, Vietnam’s manufacturing industry has been undergoing major changes as a result of government initiatives, WTO commitments and industrial liberalization Industrial development strategy for the period 2011-2020 to focus on the development of Textiles, Leather, Chemicals, Agro processing, Electronics, Automotive, Information and Communications technologies are expected benefit from the industrial development strategy Due to improving business climate, increased trade and investment cooperation, low labor cost and Vietnam is expected to emerge as a major manufacturing hub in the ASEAN region Hence, the vitalization of firms in this industry is very important for the growth of country During crisis period, many firms in sector have been badly affected resulted from high leverage in capital structure The companies, well overcome such bad cycle of economy, generally not only well prepare for business operation to maintain profitability, but also less involve in debts by optimal capital structure 1.3 Research Objective: Which the relationship between debts and profitability? Does the fiscal benefit makes debt more attractive than other funding resource? Does the risk associated to the increase of the debt can, or should, be taken by the firm? Should the financing decisions of the firms follow a single pattern, irrespective of the country where it operates? Those are By Truong Hanh Duyen – Mbus of 44 Debts & Profitability: An examination of manufacturing firms listed in Vietnam frequently asked questions that are significantly present in the processes related to decision of capital structure of any firms Decisions of that type tend to become even more difficult when the economic conditions of the country where the firm operates already are typically more uncertain In the Vietnamese case, specifically, the presence of two aggravating factors is observed: first is the high interest rates practiced in the financial market, and second is the instability of the economy before the international conjuncture Those two factors play distinct roles; however, they produce similar effects under the scope of uncertainty Any firm finances its operation and investment by either debt or equity and mostly both The firms might like to raise finance from their internal resources, instead of the bank loans and debt issues Thus the external equity financing is their last option Conversely, many organizations use debt financing to reduce their cost of capital so that they can lower the “Weighted Average Cost of Capital (WACC) ” as it will allow the firms to have wider extent of acceptance for capital budgeting options There’s many argument on the relationship of leverage (ratios of debts in asset structure) and business performance before As a point of departure, the Modigliani and Miller (M&M) (1958) stated: With perfect capital markets and no taxes or information asymmetry, debt financing has no effect on value However, in a subsequent paper, M&M (1963) eased the conditions and showed that under capital market imperfection where interest expenses are tax deductible, firm value will increase with higher financial leverage Later, Miller (1977), elaborated a new revision, analyzing the subject of the taxes paid by the investors, concluding that the corporate tax benefits of debt are reduced by the tax penalty due to personal taxation Models based on impact of tax, suggest that profitable companies should have more debts However, increasing debt results in an increased probability of bankruptcy Hence, the optimal capital structure represents a level of leverage that balances bankruptcy costs and benefits of debt finance A calculation of a firm's cost of capital in which each category of capital is proportionately weighted All capital sources - common stock, preferred stock, bonds and any other long-term debt - are included in a WACC calculation All else equal, the WACC of a firm increases as the beta and rate of return on equity increases, as an increase in WACC notes a decrease in valuation and a higher risk By Truong Hanh Duyen – Mbus of 44 Debts & Profitability: An examination of manufacturing firms listed in Vietnam Since all firms’ managers try to get the optimal capital structure with least possible cost, this led in 1984 for the pecking order theory to emerge The theory began from Myers (1984) states that there is no optimal capital structure for a firm, according to this theory, since there is asymmetric information between managers and shareholders Therefore to minimize this asymmetric information, firms prioritize their sources of finance (from internal financing to equity) according to the principle of least effort or of least resistance, retained earnings are better than debt and debt is better than equity But there is another suggestion for case of asymmetric information; managers, directly involve in daily operations of business, thus could master detailed positions of businesses and what are actually being happened in the firms; whilst shareholders mainly rely on the reports from managers, and could be disguised by the beautiful and vivid wordings of those reports Hence, to make manager be more responsible for their jobs, the firm owners prefer to get more debts rather than equity; repayment obligation of debts and interest occurred push managers work harder to get more profitability in the bottom line of income reports Due to the importance of the issue and the impact of the financial structure or choice of funding sources on the performance of companies, there are many previous studies and various researches lead us to verify the relationship between capital structures or debts and the performance of companies in different markets generally, but not many for emerging markets and particularly for Vietnam financial market which is characterized as small and unstable Furthermore, management of capital structures in Vietnam is typically different from others due to components such as high cost of debt, unstable policy and political issues of a social republic country Unlike previous studies, this paper focuses deeply in the relationship between debts and profitability of listed manufacturing firms on Vietnam Stock Exchange Specifically, it is aimed at: examining the relationship between Short-term debt, Long-term debt, Total debts, and Net Profit Margin (NM) and Return on Equity (ROE) This study will be significant to managers and shareholders in deciding proportion of debts and each debt types to finance their operations and to maximize firm value which then contributes to the economic development of Vietnam By Truong Hanh Duyen – Mbus of 44 Debts & Profitability: An examination of manufacturing firms listed in Vietnam 1.4 Research structure: This thesis comprises five chapters Chapter 1: “Introduction” generally introduces the subject area interest with defined problems, research questions, research objectives, and sources of information to be collected for the research Chapter 2: “Literature Review” summarizes concepts and theories relating to debts, profitability and the relationship between them From such reviews, basic theories for studying will be synthesized to develop an initial research model and hypotheses used for the research Chapter 3: “Research Methodology” introduces the approach method of this research through four sub-sessions including research design, variables definition, samples collection and method of data analysis Chapter 4: “Empirical Results & Discussion” reports the analysis results and meaningful figures Chapter 5: “Implications & Conclusions” discusses the implications of the results and findings in session four, limitations are also drawn; based on which conclusions and recommendations are provided Some appendix for detailed outputs from SPSS will be put at last papers for references By Truong Hanh Duyen – Mbus 10 of 44 Debts & Profitability: An examination of manufacturing firms listed in Vietnam CHAPTER 5: IMPLICATIONS & CONCLUSIONS This research assesses the impact of debts on profitability of manufacturing firms in Vietnamese through financials from 200 selected firms listed on Vietnam Stock Exchange Methods of data collection, data analysis and results have been elaborated in Chapter and This chapter is to drawn important implication and conclusion about the research Managerial implications will be discussed first, then will be followed by limitations, and will be finished by conclusions which also include recommendations for further research 5.1 Implication: The finance decision of the company is characterized as being of extreme difficult, involving the analysis of many other factors In the specific case of the Vietnamese economy, the difficulties are enlarged due to the instability, a common feature of an economy that recently went through a process of monetary adjustment and that still very dependent on instruments of monetary politics, especially interest rate, and external relations The present work just tried to examines the impact of debts on profitability of manufacturing firms’ in Vietnam Based on the selected sample size and using debts indicators like Short-term Debt to Total assets (SDTA), Long-term Debt to Total assets (LDTA), Total Debts to Total assets (TDTA) and Total debts to Total shareholder’s equity (TDSE) as well as Return on equity (ROE) and Net margin ratio as profitability indicators, the study concludes that statistically debts represented by short-term debt to total assets (SDTA) have a negative significant impact on net margin, whilst long-term debts to total assets (LDTA), total debts to total assets (TDTA) and total debt to equity (TDSE) are not major determinants of firms’ profitability These findings imply that an increase in short-term debt position is associated with a decrease in profitability; thus, the higher the short-term debt, the lower the profitability of the firm The results from this research were not totally matched any previous studies, but somehow partially matched with the works of Zeitun and Tian (2007) that debt level is negatively related with performance; Pratheepkanth (2011) that there is a negative By Truong Hanh Duyen – Mbus 30 of 44 Debts & Profitability: An examination of manufacturing firms listed in Vietnam relationship between net profit and capital structure (ratios of debt and equity over fund); Husnan (2001) that the use of debt is not significant to the multinational companies’ ROE; Ebaid (2009) that capital structure (including short-term debt, long-term debt and total debt) have no significant impact on an organization’s performance which is measured by ROE On the contrary, prior empirical studies showed different results compared to my research are Abor (2005), Arbabiyan and Safari (2009), Harjanti and Tandelilin (2007), Valeriu and Nimalathasan (2010), Luper and Isaac (2012) 5.2 Limitation: Although this research was carefully prepared, I am still aware of its limitations and shortcomings The research was conducted in a limited population of 200 manufacturing firms listed on Vietnam Stock Exchange It would be better if it was done in a larger sample including not only listed but also non-listed companies Furthermore, though manufacturing firms is one of country’s main industry sectors, but not represent the majority of firms in Vietnam In fact there are many other sectors Therefore, the result may not represent the result on other sectors in Vietnam; and implication from this result can not be applied to the whole Apart from that, there is problem with the firms in the sample set which adopt different accounting policies In addition, the period for annual closing account is different among the companies Different accounting policies and period for annual closing account for comparison will influence the accuracy of the result In order to get the more convince and precise result, the time-series data collected should covered longer period In addition, more and new variables of debts and profitability should be captured in the model in order to obtain more comprehensive results In addition, it is important to conduct the study for the period within consistent economic predicament by specify the accurate time period before and during the crisis in order to avoid biases in the analysis By Truong Hanh Duyen – Mbus 31 of 44 Debts & Profitability: An examination of manufacturing firms listed in Vietnam 5.3 Conclusion: Corporations need capital in order to improve and grow A part of the capital can be provided from internal resources of a corporation such as retained earnings which is obtained from corporation’s profit and is not divided among shareholders The rest of the capital can be borrowed or be provided from capital markets Managers have to develop efficient debt policies in order to suitably face financial issues Debt policies are related to the corporation’s value and a change in financial leverage will lead to a change in total cost of a capital and the corporation’s total value In brief, short-term loans have negative relationships with firms’ profitability The study recommends that managers should be careful while using short term debts as a source of finance since a negative relationship exists between debts and profitability variables used in this work They should try to finance their activities with retained earnings and use debt as a last option as supported by the pecking order theory Based on the result mentioned above, the following recommendations are suggested: The optimal capital structure for manufacturing firms in Vietnam should be constituted of less short-term debts (current liabilities) than other resources In other words, it’s better to maintain portion of current liabilities to total assets is less than portions of non-current liabilities and equity This study is limited to the sample of 200 manufacturing firms listed on Vietnam Stock Exchange Future research should investigate generalizations of the findings beyond the manufacturing sectors There are some other ways in which this study could be further extended First, employing other performance measures may provide supplementary results Second, in this study we use Short-term debt, Long-term debt and Total debts to measure of debts, but it’s better to detail into short-term bank loan, Long-term bank loan and Total bank loan The banks/ lenders/ creditors are recommended to more cautiously examine the ratio of short-term debt to total assets from borrowers/ debtors before any financing decisions to control and reduce bankruptcy costs By Truong Hanh Duyen – Mbus 32 of 44 Debts & Profitability: An examination of manufacturing firms listed in Vietnam References Abor, J (2005) The effect of capital structure on profitability: an empirical analysis of listed firms in Ghana Journal of Risk Finance, 6(5), 438-445 http://dx.doi.org/10.1108/15265940510633505 Abor, J (2007) Debt policy and performance of SMEs Journal of Risk Finance, 8(4), 364-379 http://dx.doi.org/10.1108/15265940710777315 Anne P V (2010) The Modigliani-Miller Theorem The Modigliani-Miller Proposition after Fifty Years and Entrepreneurial Finance, 19, 3-7 Arbabiyan, A & Safari, M (2009) The effects of capital structure and profitability in the listed firms in Tehran Stock Exchange Journal of Management Perspective, 33, pp 159-175 Arif, S., & Muhammad S 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Some Evidence from International Data Journal of Finance, 50 (5), 1421-1460 By Truong Hanh Duyen – Mbus 34 of 44 Debts & Profitability: An examination of manufacturing firms listed in Vietnam Romettulla, F & Elsana, E (2012) Capital Structure and Profitability: The Macedonian Case European Scientific Journal, (7), 51-58 Wali, R., Goher, F & Mehboob, A (2012) Impact of Debt Structure on Profitability in Textile Industry of Pakistan International journal of environmental research (IJER), Mar-Apr 2012, 61-70 Zeitun, R and Tian, G (2007) Capital structure and corporate performance: evidence from Jordan Australasian Accounting Business and Finance Journal, 1(4), 40 - 49 Retrieved from website: http://ro.uow.edu.au/aabfj/vol1/iss4/3 By Truong Hanh Duyen – Mbus 35 of 44 Debts & Profitability: An examination of manufacturing firms listed in Vietnam Appendix 1: Outliners Case Processing Summary SDTA LDTA TDTA TDSE Net Margin ROE By Truong Hanh Duyen – Mbus Valid 223 100.0% 223 100.0% 223 100.0% 223 100.0% 223 100.0% 223 100.0% Missing 0 0 0 0% 0% 0% 0% 0% 0% Total 223 100.0% 223 100.0% 223 100.0% 223 100.0% 223 100.0% 223 100.0% 36 of 44 Debts & Profitability: An examination of manufacturing firms listed in Vietnam Appendix 2: Normality and Heteroskedasticity By Truong Hanh Duyen – Mbus 37 of 44 Debts & Profitability: An examination of manufacturing firms listed in Vietnam By Truong Hanh Duyen – Mbus 38 of 44 Debts & Profitability: An examination of manufacturing firms listed in Vietnam Appendix 3: MLR between Net margin and independent variables b Variables Entered/Removed Model Variables Entered Variables Removed Method TDSE, LDTA, Enter a SDTA a Tolerance = 000 limits reached b Dependent Variable: Net Margin Model Summary Model R R Square Adjusted R Square Std Error of the Estimate a 279 268 4.38190% 529 a Predictors: (Constant), TDSE, LDTA, SDTA ANOVA Model Regression Residual Total Sum of Squares 1459.819 3763.409 5223.227 b df Mean Square 486.606 196 199 F 25.343 Sig a 000 19.201 a Predictors: (Constant), TDSE, LDTA, SDTA b Dependent Variable: Net Margin Coefficients Model (Constant ) SDTA Unstandardized Coefficients B Std Error 14.38 -.178 1.141 LDTA TDSE a Standardized Coefficients Beta Collinearity Statistics t Sig Tolerance VIF 036 12.60 000 -.565 -4.932 000 281 3.564 000 052 000 -.002 998 515 1.941 002 006 049 224 4.470 382 703 a Dependent Variable: Net Margin By Truong Hanh Duyen – Mbus 39 of 44 Debts & Profitability: An examination of manufacturing firms listed in Vietnam Excluded Variables Model Beta In TDT A a b Collinearity Statistics Minimum t Sig Partial Correlation Tolerance VIF Tolerance 000 000 a Predictors in the Model: (Constant), TDSE, LDTA, SDTA b Dependent Variable: Net Margin Collinearity Diagnostics Dimen Model sion Eigenvalue Condition Index a Variance Proportions (Constant) SDTA LDTA TDSE 3.305 477 1.000 2.631 01 01 00 01 02 47 01 00 197 4.099 16 00 06 23 020 12.734 82 98 46 76 a Dependent Variable: Net Margin Residuals Statistics Minimum Predicted Value Residual Std Predicted Value Std Residual Maximum a Mean 1.7631% 12.9061% 7.1957% -11.71090% 17.43534% 00000% -2.006 2.108 000 -2.673 3.979 000 Std Deviation N 2.70846% 4.34875% 1.000 200 200 200 992 200 a Dependent Variable: Net Margin By Truong Hanh Duyen – Mbus 40 of 44 Debts & Profitability: An examination of manufacturing firms listed in Vietnam By Truong Hanh Duyen – Mbus 41 of 44 Debts & Profitability: An examination of manufacturing firms listed in Vietnam Appendix 4: MLR between ROE and independent variables Variables Entered/Removed b Model Variables Entered Variables Removed Method TDSE, LDTA, Enter a SDTA a Tolerance = 000 limits reached b Dependent Variable: ROE Model Model Summary R Square Adjusted R Square Std Error of the Estimate R a 007 -.008 085 a Predictors: (Constant), TDSE, LDTA, SDTA ANOVA Model Regression Residual Total Sum of Squares 133.338 18472.101 18605.440 9.70801% b df Mean Square 44.446 196 199 F 472 Sig .702 a 94.245 a Predictors: (Constant), TDSE, LDTA, SDTA b Dependent Variable: ROE Coefficients Model Unstandardized Coefficients B Std Error (Constant 19.49 ) SDTA -.080 Standardized Coefficients Beta 2.528 080 LDTA -.015 115 TDSE 012 014 a Dependent Variable: a t Collinearity Statistics Sig Tolerance VIF 7.715 000 -.135 - 317 1.004 -.013 -.126 900 125 832 407 281 3.564 515 1.941 224 4.470 ROE By Truong Hanh Duyen – Mbus 42 of 44 Debts & Profitability: An examination of manufacturing firms listed in Vietnam Excluded Variables Model Beta In TDT A a b Collinearity Statistics Minimum t Sig Partial Correlation Tolerance VIF Tolerance 000 000 a Predictors in the Model: (Constant), TDSE, LDTA, SDTA b Dependent Variable: ROE Collinearity Diagnostics Mode Dimensio l n Eigenvalue Condition Index a Variance Proportions (Constant) SDTA LDTA TDSE 3.305 477 1.000 2.631 01 01 00 01 02 47 01 00 197 4.099 16 00 06 23 020 12.734 82 98 46 76 a Dependent Variable: ROE Residuals Statistics Minimum Predicted Value Residual Std Predicted Value Std Residual Maximum a Mean 16.4439% 23.7008% 17.5737% -34.14282% 24.60652% 00000% -1.380 7.485 000 -3.517 2.535 000 Std Deviation N 81856% 9.63455% 1.000 200 200 200 992 200 a Dependent Variable: ROE By Truong Hanh Duyen – Mbus 43 of 44 Debts & Profitability: An examination of manufacturing firms listed in Vietnam By Truong Hanh Duyen – Mbus 44 of 44 ... Truong Hanh Duyen – Mbus 40 of 44 Debts & Profitability: An examination of manufacturing firms listed in Vietnam By Truong Hanh Duyen – Mbus 41 of 44 Debts & Profitability: An examination of manufacturing. .. examination of manufacturing firms listed in Vietnam return on equity and net margin of manufacturing firms listed on Vietnam Stock Exchange This research was limited to the analysis to manufacturing. .. International Data Journal of Finance, 50 (5 ), 1421-1460 By Truong Hanh Duyen – Mbus 34 of 44 Debts & Profitability: An examination of manufacturing firms listed in Vietnam Romettulla, F & Elsana, E