The purpose of this paper is to explore and analyze the impact of the financial ratios on the financial performance of two different types of service industries called Group 1 and Group 2. The Group 1 consists of maritime transport, air transport, hotel and car rental industries that depend on real estate as a major source of income, while the Group 2 consists of travel agencies, trading companies and information service industry that does not depend on real estate as a major source of income. This study mainly analyzed 12 representative financial ratios which are divided into the following four categories: stability ratios, profitability ratios, growth ratios and activity ratios. The secondary data used in this study has been collected based on KIS-VALUE from 2015 to 2019. A multiple regression model has been used and secondary data has been analyzed based on SPSS 26.0.
The analysis result of the factors affecting the financial performance of Group 1 showed that for the stability ratios, the DR was found to have an effect on the ROE and OITS; SER was analyzed to have an effect only on OITS. In terms of growth ratios, OPGR has an effect on ROS and the OITS; TAGR only has an effect the ROE.
For the activity ratios, the TAT only has an effect on the ROA and SET only has an effect on the ROS. The analysis result of the factors affecting the financial performance of Group 2 showed that for the stability ratios, it is found that the DR has an effect on the ROA, ROS and OITS; SER has an influence only on the ROE. In terms of activity ratios, the TAT and SET were found to have a significant impact on all profitability ratios. In summary, for the group 1, focusing on increasing operating profit is a good way to better improve the company's profitability; for the group 2, focusing on reducing debt ratio and increasing capital turnover ratio can be better improve the company's profitability.
This study can be used as a measurement to see whether the difference in the asset structure of the service industry will affect the relationship between financial ratios and financial performance. Finally, the implications of these findings are discussed and future research directions are suggested based on the results of this study.