Effects of Market Risk on the Financial Performance of Food and Beverage Companies Listed on the Vietnam Stock Exchange

This study investigated the effects of market risk on the financial performance of 47 food and beverage companies listed on the Vietnam Stock Exchange, including the Ho Chi Minh City Stock Exchange (HOSE) and the Hanoi Stock Exchange (HNX), over the period of 2008-2022. Forty-seven companies were selected based on industry classification criteria and relevance in the research period. The return on assets, return on equity, and net profit margin were used to represent the financial performance, and the gearing ratio, book-to-market ratio, and financial leverage as the market risk factors. This research used the OLS model, fixed effect model (FEM), and random effect model (REM) for the panel data. The results showed that the impact of the variables was different in the different models. The book to market ratio and gearing ratio had significant negative influences on the companies’ financial performance while the degree of financial leverage and inflation rate showed positive consequences due to the moderate level of inflation in Vietnam over the period of 2008-2022. Usually, the cash ratio and company size showed a proportional relationship to financial performance, while the ratio of debt to revenue and debt to assets had an inverse relationship, meaning an increase will make the business efficiency decrease. Based on the research results, this study provided some recommendations to improve food and beverage companies’ financial performance, and also provided some information for broader research for non-financial companies listed on the Vietnam Stock Exchange.