Effect of financial leverage on the firms efficiency - An applied study on a sample of industrial companies in the region of Ghardaia for the period 2010-2015

  • الزهرة رحماني كلية العلوم الاقتصادية والعلوم التجارية وعلوم التسيير جامعة قاصدي مرباح-ورقلة، الجزائر ،
  • محمد الجموعي قريشي كلية العلوم الاقتصادية والعلوم التجارية وعلوم التسيير جامعة قاصدي مرباح-ورقلة، الجزائر
Keywords: Financial Leverage, Effeciency, Rate of Return on Assets, Debt Ratio, Debt Equity Ratio

Abstract

n this research we aim to study the effect of financial leverage on the firms efficiency according to the traditional financial index Rate of Return on Assets ROA.by applying them to a sample of industrial firms in Ghardaia region consisting of 12 companies during the period from 2010 to 2015, To determine the impact of debt ratio, ratio of debt to equity, firm size and growth rate on the rate of return on assets, depending on the SPSS statistical program. The most important findings of the study There is a statistically significant inverse relation between the debt ratio and the rate of return on assets, And a low positive correlation between the ratio of debt to equity and return on assets, firms should therefore prefer internal finance to external financing to increase return.

Published
2020-12-09