2.3 of stock out thus, the firm size has


3 FIRM SIZETo the present literature, there is no specificdefinition of firm size. The use of size by theory was the number of employees,total assets, sales or marketing capitalization. On the other hand, the conceptof firm size has been used for variety theoretical constructs ranging from riskto liquidity (Ball and Foster, 1982). In recent years, there has been an increasing amountof literature on effects of firm size to the performances of a firms  (e.g., Tovar, JavierRamos-Real, & de Almeida, 2011) states that the size of a firm is crucial forindustry’s productivity . This is because, the firms size determines thedevelopment of the productivity via the scale impact. (Offenberg, 2009) found that, the amount of dollar is the fastermeasures of a firm size.

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He stated that, the variance of sales increased wherefor the largest firms are larger and those small firm are small. This has beenargued by Bourlakis, Maglaras,Aktas, Gallear, & Fotopoulos, (2014) in their studies where they found that, small firmare likely increased their profit because small firms can easily build a strongrelationship with their customer. According to their research, this is due tothe distribution of raw material (assets) in the small firm. Besides that,small firms see to perform well in their number of employees where theymaximize their employees sources in the productions. Hence, small firms performbetter in their market capitalization which makes these firm more profitable.Hence, the proportion of earing per share will be determined from the profitearned. Aboody, Barth, & Kasznik, (1999) stated that, the current values of assets is important tothe users of financial statement.

The reflection of asset value will provide abetter insight for firm performances either it has a higher or lower EPSdistribution. On the other hands, the firm with large inventory may lead tohigher sales. Larger inventory prevent the risk of stock out thus, the firmsize has a positive relationship with the earning per share. 2.4 TANGIBILITYOF ASSETSTangible asset is anassets that can be seen, touched and reproduced. Hence, it is easier to priceand determining the firm value (Tangible Assets, n.

d) as tangible assetsconsidered as one of major determinant in firm’s performances in term ofearning per share (Omowunmi, 1983). Vo (2017) reviewed theliterature from the period and found a claims that, both agency theory andtrade–off theory suggested the importance of tangible assets in determining thecapital structures of a firm. Fernandes (2011) found that, the more tangibleassets owned by firm the lower risk faced by the lender. Hence, the firm willgenerates more profit due to the less financial constraint faced by thosefirms. In accordance to that, the earning per share will be influenced from theassets and profit maximization (Kim, 2017). Prior studies by Aboody, Barth, & Kasznik, (1999) indicates that, the revaluations of fixed asset hassignificant relationship with operating performances in correlation with theearning per share. A research about the fixed assets in UK firms indicatesthat, the changes in operating income for the time series characteristic ofearning can affect the future operating income.

In summary, the firm with more tangible asset aremore likely better to raise finance and therefore a positive relationshipbetween tangible asset and earning per share is expected.