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  6. Factors Affecting the Financial Performa ...

Journal of Security and Sustainability Issues

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Factors Affecting the Financial Performance of a Firm in Online Social Media Industry – a Case of the Facebook in US
Volume 10, Issue 2 (2020), pp. 683–694
Do Phuong Thao   Pham Thi Thu Thuy   Pham Tuan Anh  

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https://doi.org/10.9770/jssi.2020.10.2(25)
Pub. online: 30 December 2020      Type: Article      Open accessOpen Access

Published
30 December 2020

Abstract

Sustainability of financial performance of a giant media firm such as Facebook wil be dependepent on various factors such as Lending rate, turnover ratio, current ratio, etc. Facebook has achievements in online social media and network industry, deserving of its position as one of the leading firms in the online social media system, contributing to online marketing services. Movement of stock price of Facebook will reflect the business health of the company. Good business management requires us to consider the impacts of multi micro and macro factors on net profit, and it contributes to promoting business plan and socio-economic policies for economic growth and stabilizing macroeconomic factors. By data collection method through statistics, analysis, synthesis, comparison, quantitative analysis to generate qualitative comments and discussion; using econometric method to perform regression equation and evaluate quantitative results, the article analyzed and evaluated the impacts of Eight (8) micro and macroeconomic factors such as: Current Ratio (CR), Debt to Equity Ratio (DTE), Asset Turnover Ratio (ATO), Receivables Turnover Ratio (RTO), Consumer Price Index (CPI), Lending Rate(LDR), GPD Growth Rate (GGR) and Employment Cost Index (ECI) on Return on Assets (ROA) of an online social media firm, Facebook in the US in the period of 2012-2019, both positive and negative sides. The research results show a statistically significant relationship between a micro factor (ATO), two macro factors (LDR and ECI) with Facebook’s ROA, in which, LDR has a negative impact on ROA, while ATO has the highest positive impact on ROA, and ECI has also the positive effect on ROA but to a lesser extent. The research findings are of value to financial executives and investors not only for Facebook but also for companies in the online social media industry.

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Keywords
sustainability of financial performance facebook’s ROA asset turnover ratio lending rate employment cost index

JEL
C30 G30

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Generolo Jono Žemaičio Lietuvos karo akademija Šilo g. 5A., LT-10322 Vilnius, el.p: lka@mil.lt

General Jonas Žemaitis Military Academy of Lithuania  Šilo Str. 5A, LT-10322 Vilnius, Lithuania, e-mail: lka@mil.lt

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