A Note On The Financial Performance of Conglomerate versus Non-Conglomerate

Abstract

The objective of this study is to look at the accounting based measure to draw an implication pertaining to the financial performance of conglomerate and non-conglomerate companies, which are listed on the Kuala Lumpur Stock Exchange. Market perception of a company's growth and profit opportunities as depicted by Tobin's g and price earnings ratio is higher for the conglomerate than the non-conglomerate. While there is evidence of size maximising activity for the years 1981 to 19585 as depicted by the low ROE, high growth and total assets, conglomerate activity in general, may also be regarded as an attempt to maximise the value of the shareholder's wealth.