Relationship between Corporate Governance and Financial Ratio with Performance of Listed Companies on The Stock Exchange of Thailand with Excellent Score

Abstract

This research aimsed to 1) study the relationship between corporate governance, 2) liquidity financial ratios, and 3) debt serviceability financial ratios and the performance of companies listed on the stock exchange of Thailand with an excellent score. The data were collected from annual registration statements (Form 56-1) of 191 companies from 2016 to 2020. Statistics used in data analysis including mean, percentage, standard deviation, Pearson correlation analysis, and multiple regression analysis. The results of the study found that: 1) corporate governance included (1) size of the company's board of directors and the proportion of independent directors has a positive relationship with the company's performance in terms of gross profit ratio, (2) all aspects of corporate governance were not related to the company's performance in terms of net profit ratio, (3) size of the company's board of directors and the shareholding ratio of the executive committee had a positive relationship with the company's performance in terms of return on assets ratio, and (4) the size of the board of directors and the shareholding proportion of the executive committee had a positive relationship with the company's performance in terms of return on equity ratio. 2) Financial liquidity was not related to the performance of companies listed on the Stock Exchange of Thailand that have excellent corporate governance in all aspects. 3) The ability to repay debt includes (1) the debt-to-equity ratio had a negative relationship with the gross profit ratio, (2) the ability to pay off debt has no relationship with the company's performance in terms of net profit ratio, (3) debt to equity ratio had a negative relationship. As for the interest coverage ratio, it had a positive relationship with the company's performance in terms of return on assets ratio, and (4) and (4) debt-to-asset ratio. And the return on assets ratio has a positive relationship and the debt-to-equity ratio has a negative relationship with the company's performance in terms of return on equity ratio at the significance level of .01.