2014•Unpublished venueRequires access

The Effect of Leverage on Cement Industry Profitability

Somayyeh Mahmoudi

Abstract

This study presents an empirical insight into the relationship between leverage and firm profitability .Short term debt to equity(STD/E) and long term debt to equity (LTD/E)were considered as leverage variables .Firm profitability is measured using return on equity(ROE) and return on assets (ROA).For this purpose 28 cement firms have been studied on Tehran Stock Exchange during the time period 2008-2011 and the regression model and descriptive have been used in order to test the hypotheses. The results suggested that there was a significant and negative relationship between leverage and firm profitability.

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Key concepts: Profitability index, Return on equity, Return on assets, Leverage (statistics), Debt-to-equity ratio, Stock exchange, Business, Econometrics