The Impact of Activity Ratios among Industrial Sectors’ Performance: Jordanian Case

Abstract

Jordanian industrial sector is understood to be a primary key sector of the economy due to multitude of opportunities in this sector. It is known that the manufacturer who pursuing the legal compliances of the business constitute the frame of the industrial sectors. This study conducted to verify the impact of total asset turnover ratio and fixed asset turnover ratio on return on assets (ROA) among Jordanian industrial sectors. A simple liner regression used to test a period 2008- 2011 in order to conclude the extent of the impact of activity turnover ratios on Companies' performance among Jordanian industrial sectors.The study showed there is significant impact of total asset turnover ratio on Jordanian Industrial sectors’ return on asset (ROA), thus changes in return on asset (ROA) have described by total asset turnover ratio. Also, there is significant impact of fixed asset turnover ratio on Jordanian Industrial sectors’ return on asset (ROA), thus changes in return on assets (ROA) have described by fixed assets turnover ratio, finally, there is significant impact of activity turnover ratios on Jordanian Industrial sectors’ performance.The study revealed also that the Textiles, Leathers and Clothing’s sector has the lowest Total asset turnover ratio and the Tobacco and Cigarettes sector has the highest and Paper and Cardboard Industries sector has the lowest fixed assets turnover but the Tobacco and Cigarettes has the highest, on the other hand that the Glass and Ceramic Industries sector has the lowest return on assets and the Mining and Extraction sector has the highest.

Keywords: Total Asset Turnover Ratio, Fixed Asset Turnover Ratio, Return on Assets (ROA), Amman Stock Exchange (ASE).