FACTORS INFLUENCING FINANCIAL PERFORMANCE OF TAKAFUL
\nFIRM IN MALAYSIA

The objective of this study is to analyze the relationship between the internal factors and the
\nfinancial performance of takaful companies in Malaysia. The internal factors that were tested are
\nliquidity (LQ), return on equity (ROE), leverage (LV), and size of the firm (SIZE). The financial
\nperformance of takaful firms is measured by using the return on assets (ROA) ratio. The study uses
\npecking order theory as the basis for explaining the disclosure of the financial performance of the
\nfirms involved. The type of data used in this research is secondary data, that are retrieved from the
\ncompany’s annual report. The number sample in this study used is 6 takaful firms listed in Bursa
\nMalaysia with observations year from 2016-2020. To analyze the relationship between all internal
\nfactors and takaful firm’s financial performance, the study uses Descriptive statistics, Corelation
\nanalysis, Durbin-Watson test (OLS), White test and Variance Inflation factors. To determine the
\nsuitable model, the Hausman test is used. The result of this research shows that liquidity level and
\nleverage have a negative insignificant effect on takaful firm’s financial performance while return
\non equity and size of the firm is positively insignificant.