The Effect of Leverage on Profitability of Pharmaceutical Companies

Nicoleta Bărbuţă-Mişu

Economics and Applied Informatics, 2013, issue 1, 45-52

Abstract: The capital structure problem is important and because of the influence of leverage effect on return on equity. This paper aims to study the influence of financial leverage effect on company profitability, using financial data of three large companies from Romania, acting in pharmaceutical sector, in entire production-distribution chain. To carry out this study have been completed three stages: analyses of the profitability of the companies, analyses of the indebtedness and then the effect of leverage on return on equity, using data from 2008-2012 period. The conclusion that emerges in this study is that leverage effect is an important factor that influences the return on equity in function of degree of debts, but not entirely.

Keywords: Profitability; Return on assets; Return on equity; Leverage effect; Pharmaceutical sector (search for similar items in EconPapers)
JEL-codes: G30 G32 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.eia.feaa.ugal.ro/images/eia/2013_1/BarbutaMisu.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ddj:fseeai:y:2013:i:1:p:45-52

Access Statistics for this article

More articles in Economics and Applied Informatics from "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration Contact information at EDIRC.
Bibliographic data for series maintained by Gianina Mihai ().