Abstract
Purpose: the aim of this research is to test the effect of financial ratio on the financial performance of tourism destination firms listed on stock exchange in China. The research selected ratios: current ratio (CR) as a dimension of liquidity, total asset turnover ratio (TATR) as a dimension of asset utilization, debt ratio (DE) as a dimension of leverage, natural logarithm of total asset (LNTA) as a dimension of firm size, GDP growth rate as a dimension of economic prosperity, and effective tax rate as a dimension of effective tax. This research will use return on asset (ROA), return on sales (ROS), return on equity (ROE) and sales growth (SG) to determine the financial performance. Since stock exchange founded in China, tourism destination firm developed very fast. However tourism destination listed firms have weakness financial performance. Design/methodology/approach: the research data collected from quarterly financial report, from 2012 Q1 to 2018 Q4. The secondary data has been analyzed by multiple regression. Finding: the result indicate that CR, TATR, GDP growth rate have positive impact on financial performance. While DE has negative impact on financial performance. And LNTA has a mix result with financial performance. Originality/value: This study led to the effect of financial ratios on tourism’s financial performance since past researches with this aim were difficult to identify and certain references were not specifically linked to the topic.