Determination of Profit and Loss Sharing Ratios in Interest-Free Business Finance

Zubair Hasan

MPRA Paper from University Library of Munich, Germany

Abstract: This paper discusses how profit and loss sharing ratios will be determined at the micro and micro levels in an interest free system of financing business operating side by side of an interest based conventional financing.It shows that leverage magnification of return on owners' equity is also available under the Islamic financing. It argues that for the bank Islamic finance may be more profitable than conventional financing

Keywords: Profit sharing; macro level model; mico model; leverage effects; relative profitability (search for similar items in EconPapers)
JEL-codes: D40 D49 E10 (search for similar items in EconPapers)
Date: 1985
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Citations: View citations in EconPapers (17)

Published in Journal of Research in Islamic Economics 1.3(1985): pp. 13-29

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