The Mediating Effect of Financial Adaptability in the Relationship between Digital Transformation and Financial Performance

This study focused on the impact of digital transformation on financial performance, considering financial adaptability as a mediating factor in this relationship. The study selected Malaysian companies for the period 2015-2024. The quantitative approach was employed, with digital transformation as the independent variable, financial performance as the dependent variable, and financial adaptability as the mediating variable. To achieve the study's objectives, a range of statistical analyses were applied to the data, including linear regression, correlation, analysis of variance (ANOVA), and t-tests. SPSS and Smart PLS software were used for data analysis. The data used in the statistical analyses were obtained from the annual reports and websites of companies listed on the Malaysian stock market. The results of this study indicate a positive relationship between digital transformation and financial performance, as well as a positive relationship between financial adaptability and financial performance. Furthermore, the indirect relationship between digital transformation and financial performance showed a statistically significant positive effect. The contribution of this scientific study lies in its attempt to arrive at accurate estimates and a precise understanding of the study variables, and to adapt to financial changes in order to reach optimal financial decisions in volatile circumstances.