IMPACT OF FIRM SPECIFIC FACTORS ON PROFITABILITY OF INDUSTRIAL GRINDING COMPANIES

In this paper, panel ordinary least squares model of industrial grinding companies listed on Belgrade Stock Exchange was used for examining the determinants of profitability. For this purpose, 62 observations of companies over the period of 2008 - 2014 were included. Return on equity considered as a measure for profitability is a dependent variable whereas size, leverage, years of firm existence, number of stock and book value per share are considered as independent variables. According to the findings, leverage, number of stock and book value per share are statistically significant of inverse relationship with profitability for selected listed industrial grinding companies in Serbia. Size (+) and age (-) indicate insignificant impacts on profitability. The results revealed that all independent variables explain 84.4% of the variance on return on equity. The results of Granger causality test indicated causality between profitability and leverage, profitability and number of stocks are bidirectional. (C) 2018 EA. All rights reserved.