ASSESSING BUSINESS PERFORMANCE THROUGH ECONOMIC VALUE ADDED AND PROFITABILITY ON STOCK VALUES: CASE STUDY OF THE AGRICULTURAL AND FOOD SECTOR IN THE SET AND MAI MARKETS

Abstract

This research aims to investigate the impact of profitability on market valuation and the relationship between profit-generating capabilities and the valuation of listed companies in the Agriculture and Food industry on the Stock Exchange of Thailand. The descriptive analysis reveals that the industry maintains average P/E ratio at 10.37 and P/BV ratio at 1.60, respectively, reflecting moderate stock valuation that aligns with the cyclical volatility of agricultural commodities. Although overall profitability remains robust—evidenced by an average ROE of 8.49% and ROA of 8.54%—there is significant disparity among firms due to variations in cost structures and asset utilization efficiency. The Stepwise Regression analysis reveals that ROE has a statistically significant positive effect on the P/E ratio and is the most influential variable. In contrast, WACC has a statistically significant negative effect, indicating that a higher cost of capital reduces firm value. For the P/BV model, ROA and Profitability 1 have positive effects, while WACC, firm size, and certain aspects of asset utilization efficiency have negative effects. The model explains 29.41% of the variance. These findings are highly useful for investors and corporate managers in formulating financial strategies to enhance firm value in a high-risk industry sector.

Keywords: Economic Value Added, Profitability, Management Efficiency