Impact of Financial Leverage on Firm Performance: Evidence from Telecommunication Industry in Bangladesh

Md. Sajadul Islam Sarker and Fazly Ealahi Mamun
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Md. Sajadul Islam Sarker: Department of Tourism and Hospitality Management, Leading University, Sylhet, Bangladesh.
Fazly Ealahi Mamun: Department of Islamic Studies, Leading University, Sylhet, Bangladesh.

International Journal of Science and Business, 2023, vol. 19, issue 1, 20-27

Abstract: The study's objective is to investigate how significantly financial leverage affects business performance in Bangladesh's telecommunications sector. According to data from the past eleven years (FY 2010–2020), there is a considerable difference between short-term loans and long-term loans that affects the company performance of the Bangladeshi telecommunications sector. We have employed correlation, regression, and hypothesis testing to do quantitative analysis. In this paper, secondary data have been employed. Secondary information was gathered from the financial report and journals of the company. The findings imply a favorable association between the dependent and independent variables. It should be noted that both short-term and long-term loans are necessary for the Bangladeshi telecommunications sector to operate effectively. The findings also indicated that long-term loans are quite important. The study will provide information to policymakers to help them decide what type of financing is most important for enhancing business success. The study will make an effort to advance our understanding of the interplay between financial leverage and company performance in the telecommunications sector. Finally, we offered some suggestions on how to balance the financing between short-term loans and long-term debt, as well as how to improve business performance by utilizing firm money more quickly.

Keywords: Financial leverage; Telecommunication; Performance; Return on Equity; Firm Size. (search for similar items in EconPapers)
Date: 2023
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