Factors of Net Profit Ratio, Return on Assets, and Return on Equity Affecting the Earnings Quality of Companies Listed on the Stock Exchange of Thailand: A Case Study of Service Industry Group

Abstract

     This research article aimed to study the net profit ratio, return on assets, and return on equity affecting the earnings quality of companies listed on the stock exchange of Thailand: A case study of service industry group. It was quantitative research. Samples in this study were companies listed on the stock exchange of Thailand, service business industry group 132 samples. Research tool was papers for collecting information from financial statement on the annual company report and then the data collected from the papers were analyzed by using statistics consisting of percentage, means, maximum, minimum, standard deviation and multiple regression analysis by Enter method.

           The findings revealed that the net profit ratio, return on assets, and return on equity affected the earnings quality of companies listed on the stock exchange of Thailand: A case study of service industry group at the 0.01 significance level, with correlation coefficients ranging from 0.507 to 0.746. The multiple correlation coefficient (R) was 0.841, and the coefficient of determination (R²) was 70.70%, indicating the predictive power of the model. The findings from the research reflect that the net profit ratio, return on assets and return on equity are the current profitability that arises from actual operating results and can predict future profits. The profits will be stable, which will result in a higher level of business earnings quality as well.