Ihsanullah mansoor

1. Introduction
Ihsanullah (F16-1088)
Shams Razzaq (F16-1131)
Abdul Muaid (F16-1127)
University Of Haripur, Haripur
Department of Management Science
“Impact of Total Risk Management on Firm’s Performance”

2. Presentation outlines
Introduction to the topic
Literature review
Theoretical framework
Study methodology
Analysis
Conclusion

3. Introduction to the Energy Sector

4. Introduction to the topic

5. Literature review
Find ways to manage(Rejda, 2003).
Risk are faced by public or private organizations Ranong and Phuenngam, 2009).
Hamadu Kedir Mohammed and Adriana Knapkova, 2016.
Zeitun and Tian (2007), using 167 Jordanian companies over fifteen year period (1989-2003).
Poraghajan (2013) using firm data in the Tehran stock market.

6. Study objectives
 To examine the impact of risk management, intellectual capital, firm size and financial leverage
on performance of fuel and energy sector of Pakistan.
To guide managers and investors in fuel and energy sector to be careful while taking decision.

7. Conceptual Framework
Financial Leverage
(FL)
Total Risk Management
(TRM)
Intellectual Capital (IC)
Performance (ROE)
Of Fuel and Energy sector
Firm Size (FS)

8. Methodology
Sample Size
Equations
Equation=ROE= α0 + β1 TRMit + β2 ICi t+ β3 FSIZEit+ β4 FLit+ εit
Equation=ROA = α0 + β1 TRMit + β2 ICi t+ β3 FSIZEit+ β4 FLit+ εit
Variables description and hypothesis:
Total Risk Management
Intellectual Capital
Firm Size
Financial leverage

9. Results
Descriptive Statistics
ROE TRM IC FS FL
Mean -14.89147 2011703. 0.145694 16.58983 3.986813
Median 15.81500 462580.9 0.076029 16.97785 2.580882
Maximum 157.2700 48358987 13.50189 19.72240 92.50675
Minimum -3264.570 393.5107 -4.713581 11.97381 -19.84780
Std. Dev. 326.2466 6154973. 2.170325 2.139544 10.34084
Skewness -9.829431 5.890270 2.817224 -0.694238 6.506786
Kurtosis 98.43323 40.29576 19.07802 2.610178 55.46328
Jarque-Bera 40349.38 6501.458 1233.562 8.839252 12417.43
Probability 0.000000 0.000000 0.000000 0.012039 0.000000
Sum -1518.930 2.05E+08 14.86084 1692.163 406.6549
Sum Sq. Dev. 10750118 3.83E+15 475.7415 462.3425 10800.23
Observations 102 102 102 102 102

10. Continue…
• Correlation
variables ROE TRM IC FS FL
ROE 1.000000 0.035416 0.031977 0.029753 -0.877569
TRM 0.035416 1.000000 0.012154 0.208136 -0.013385
IC 0.031977 0.012154 1.000000 0.074075 -0.002112
FS 0.029753 0.208136 0.074075 1.000000 0.201316
FL -0.877569 -0.013385 -0.002112 0.201316 1.000000

11. Results of regression
Dependent Variable: ROE Method: Panel Least Squares
Date: 01/16/17 Time: 12:45 Sample: 2010 2015
Periods included: 6 Cross-sections included: 17
Total panel (balanced) observations: 102
Variable Coefficient Std. Error t-Statistic Prob.
C -450.8990 114.5907 -3.934865 0.0002
TRM -1.20 2.37 -0.507480 0.6130
IC 2.116599 6.579891 0.321677 0.7484
FS 33.39879 6.977107 4.786911 0.0000
FL -29.08650 1.408311 -20.65347 0.0000
R-squared 0.815228 Mean dependent var -14.89147
Adjusted R-squared 0.807608 S.D. dependent var 326.2466
S.E. of regression 143.0999 Akaike info criterion 12.81274
Sum squared resid 1986325. Schwarz criterion 12.94142
Log likelihood -648.4498 Hannan-Quinn criter. 12.86485
F-statistic 106.9925 Durbin-Watson stat 0.937164

12. Conclusion
No significance relationship between TRM and intellectual with firm performance
Results also indicates significant and positive relationship between firm size and performance
while highly significant and negative relationship between financial leverage and firm
performance.
According to (Lawrence A. Gordon, Martin P. Loeb and Chih-Yang Tseng, 2009)