The Effect of Material Price Fluctuation on Operating Performance and Financial Structure: Evidence from Taiwan Copper Industry

• Main Authors: Tseng,Yu-Chin, 曾玉卿
• Other Authors: Dr.Chen,Chieh-Shuo
• Format: Others
• Language: zh-TW
• Published: 2013
• Online Access: http://ndltd.ncl.edu.tw/handle/z63m3y

碩士 === 國立彰化師範大學 === 會計學系企業高階管理 === 101 === The monetary policy and tough economy all over the world in recent years has caused a dramatic fluctuation of raw material prices, such as metals, oil and agricultural products. Especially, this also affects significantly the profitability of the electronic-related industries which are highly associated with the copper price fluctuations. This study used 41 copper-related firms cover the sample period of 2002 to 2011 and explored the influence of price fluctuation of raw materials on operating performance and financial structure using the OLS regression model. Several empirical results were found as follows: 1. The growth of copper price is significantly negatively related to some operating performance, such as gross margin ratio and ratio of operating income, and significantly positively related to Tobin’s Q. 2. The growth of copper price is significantly positively related to debt ratio and significantly negatively related to current ratio. 3. The fluctuation of copper price is significantly negatively related to some operating performance, such as gross margin ratio and ratio of operating income, and significantly positively related to total assets turnover ratio. 4. The fluctuation of copper price is significantly positively related to debt ratio. Overall, the rise or fluctuation of copper prices will negatively affect the profitability performance and financial structure, because that both the higher manufacturing costs and higher financial pressure on purchasing increase due to rising raw materials costs. The results will be useful to evaluate their hedging strategy and operating decision for firms in the copper industry. Keyword: Growth Ratio of Copper Price；Volatility of Copper Price； Operating Performance；Financial Structure.