FINANCIAL LEVERAGE IMPACT ON RETURN ON EQUITY FOR ROMANIAN LISTED COMPANIES

Nicoleta Bărbuţă-Mişu and Andreea Rusu ()

Risk in Contemporary Economy, 2014, 271-279

Abstract: The aim of this paper is to study the impact of financial leverage on return on equity for a sample of eight Romanian listed companies’ acting in the manufacturing dairy products sector, using financial leverage method. This method was applied for a period of 3 years (2010-2012) and reflects also the influence of debt policy on company’s return on equity that was determined using both accounting data and financial leverage. The conclusions that emerge in this study reflect that financial leverage effect is a key factor that influences the return on equity in function of degree of debts and the relation between return on assets and interest rate, but there are many other determinants of return on equity that are not linked by financial structure.

Keywords: leverage effect; return on assets; debt equity ratio; accounting data; financial distress (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.rce.feaa.ugal.ro/images/stories/RCE2014/papers/Barbuta-MisuRusu.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:fserec:y:2014:p:271-279

Access Statistics for this article

More articles in Risk in Contemporary Economy 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 ().