Profitability determinants in Vietnamese listed companies

Abstract

The article evaluates the impact of factors affecting profitability in Vietnamese listed companies from 2018 to 2022. Using a secondary data sample from the financial reports of 652 listed companies on the Vietnamese stock market and employing Feasible Generalized Least Squares (FGLS), the results indicate that in both research periods (2018-2022 and 2020-2021), leverage and inflation negatively impacted profitability, asset turnover and firm size have a positive impact on profitability. Conversely, liquidity and working capital showed no significant effect on both ROA and ROE. Moreover, while firm age negatively impacts profitability in the recent 5-year period (2018-2022), it does not affect profitability during the COVID-19 pandemic period (2020-2021). Based on these findings, the authors propose some recommendations to enhance company profitability.