Financial ratio analysis is one of the best technique in analyzing financial statements that enable one to make right financial decisions that can have significant impact on the action and direction of the company’s future. Financial ratios analysis can be divided into two categories: 1) ratio that measure risk which includes activity, liquidity and leverage and 2) ratios which enable to measure return such as profitability and market ratios. In this study, the researcher aims to investigate the factors that contribute to the effectiveness of utilizing revenues in accounting performance by using financial ratio analysis. This study focused on the construction companies that is listed on Bursa Malaysia. The study employed cross sectional design in data collection and analysis. The key findings of the study revealed that liquidity ratios, profitability ratios and leverage ratios had a positive significant relationship to the effectiveness of utilizing revenues in accounting performance. Among the four financial ratios, profitability ratio is found to be the main predictor to the effectiveness of utilizing revenues in accounting performance. The activity ratios on the other hand was found not significantly influence the effectiveness of utilizing revenues. In addition, based on the mean and standard deviation analysis, the level of effectiveness of utilizing revenues among construction companies is high. It was suggested that the management should manage and utilize the company liquidity, profit and leverage effectively as these are the variables that affect the effectiveness of utilizing revenues. In addition, the company should also pay attention to other possible variables that might contribute to the effectiveness of utilizing revenues in accounting performance such as interest rate and inflation rate.
