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1. Introduction
The main objective of setting up a firm is to maximize profit. According to Ross (2010), the goal of a firm's financial management is to maximize the current value per share of the existing stock. Both profitability and a firm's share value are positively correlated (Kalama, 2013). In other words, the earnings announcement is going in the same direction as stock prices. Coad (2007) further implied that a firm with high profitability would grow whilst a less profitable firm is assuming to decrease its share value. How to define this profitability into a concrete firm's financial performance management will be crucial for the company to be sustainable in any competitive environment.
Understanding profitability factors would require beyond conceptual, and it is the foundation of a firm's strategic objective and direction. It will be even more obvious during the time of crisis, a firm's attempt to preserve their financial status by undertaking measures without proper mitigation planning. These types of actions more often result in worsening their financial status.
The global pharmaceutical industry is constantly growing and is expected to grow more in the future in connection with demand factors, such as an aging society and chronic diseases and supply factors, such as the expansion of bioresearch. Pharmaceutical companies tend to develop new drugs to treat new diseases through research and development (R&D), in order to create a next-generation profit source or develop relatively cost-effective drugs to maximize enterprise value. Due to its exceptionally high R&D to sales ratio, the pharmaceutical industry is often characterized as the technology- and science-driven sector. Lee and Choi (2015) studied the R&D investment correlation with the company's important financial indicators. Becker and Lillemark (2004) concluded that by marketing the importance of R&D integration the drug development has become an interactive process where the timing, type and impact of marketing involvement are balanced and managed via certain organizational mechanisms throughout the R&D process, which is an iterative one. Nevertheless, discussion and research about profitability driven beyond R&D, and new products are limited.
Further, identifying the factors which determine comprehensive operational profitability is the major concern of researchers. Alarussi and Alhaderi (2018) have investigated that there is a strong positive relationship between total sales, working capital, company efficiency (asset turnover...