The link between debt finance and profitability in the emerging market: A case study of a furniture retail company
The objective of this research was to establish the impact of debt finance on the profitability of a firm using A furniture retail company (pseudo name “A”) as a case study. The mixed methods approach was employed quantitative data from financial statements and qualitative data from interviews. The...
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| Language: | English |
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Virtus Interpress
2023
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| Online Access: | https://cris.library.msu.ac.zw//handle/11408/5602 https://doi.org/10.22495/rgcv10i4p5 |
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| author | Lilian Nyamwanza Hilja Iyalo Haufiku Mashaya Ellen Charity Mhaka |
| author2 | Midlands State University, Gweru, Zimbabwe |
| author_facet | Midlands State University, Gweru, Zimbabwe Lilian Nyamwanza Hilja Iyalo Haufiku Mashaya Ellen Charity Mhaka |
| author_sort | Lilian Nyamwanza |
| collection | DSpace |
| description | The objective of this research was to establish the impact of debt finance on the profitability of a firm using A furniture retail company (pseudo name “A”) as a case study. The mixed methods approach was employed quantitative data from financial statements and qualitative data from interviews. The target population was 25, hence the researchers used a population census, 24 participants assisted in the research. The statistical method used for analysing secondary data was STATA 11. The regression model and variables incorporated were debt ratio, which was the independent variable, and the return on asset ratio, which was the dependent variable, and the measure of profitability in this particular research. Main findings from the research indicated that debt financing was significantly and statistically negatively affecting the return on assets of the company. The regression yielded a p-value of 0.018 and a coefficient of 0.9992 thus confirming a 99.92% that the variability in profitability is well explained by the independent variable used in this research which is debt finance. The study recommends companies to carry out an in-depth cost-benefit analysis of debt financing to ensure optimum profitability especially for small and private limited companies in a volatile economy (Zimbabwe). |
| format | research article |
| id | ir-11408-5602 |
| institution | My University |
| language | English |
| publishDate | 2023 |
| publisher | Virtus Interpress |
| record_format | dspace |
| spelling | ir-11408-56022023-05-04T11:55:42Z The link between debt finance and profitability in the emerging market: A case study of a furniture retail company Lilian Nyamwanza Hilja Iyalo Haufiku Mashaya Ellen Charity Mhaka Midlands State University, Gweru, Zimbabwe University of Namibia, Windhoek, Namibia Midlands State University, Gweru, Zimbabwe University of Namibia, Windhoek, Namibia Debt Finance Financial Risk Profitability The objective of this research was to establish the impact of debt finance on the profitability of a firm using A furniture retail company (pseudo name “A”) as a case study. The mixed methods approach was employed quantitative data from financial statements and qualitative data from interviews. The target population was 25, hence the researchers used a population census, 24 participants assisted in the research. The statistical method used for analysing secondary data was STATA 11. The regression model and variables incorporated were debt ratio, which was the independent variable, and the return on asset ratio, which was the dependent variable, and the measure of profitability in this particular research. Main findings from the research indicated that debt financing was significantly and statistically negatively affecting the return on assets of the company. The regression yielded a p-value of 0.018 and a coefficient of 0.9992 thus confirming a 99.92% that the variability in profitability is well explained by the independent variable used in this research which is debt finance. The study recommends companies to carry out an in-depth cost-benefit analysis of debt financing to ensure optimum profitability especially for small and private limited companies in a volatile economy (Zimbabwe). 10 4 57 80 2023-05-04T11:55:42Z 2023-05-04T11:55:42Z 2021-01-11 research article https://cris.library.msu.ac.zw//handle/11408/5602 https://doi.org/10.22495/rgcv10i4p5 en Risk Governance & Control: Financial Markets & Institutions 2077-4303 open Virtus Interpress |
| spellingShingle | Debt Finance Financial Risk Profitability Lilian Nyamwanza Hilja Iyalo Haufiku Mashaya Ellen Charity Mhaka The link between debt finance and profitability in the emerging market: A case study of a furniture retail company |
| title | The link between debt finance and profitability in the emerging market: A case study of a furniture retail company |
| title_full | The link between debt finance and profitability in the emerging market: A case study of a furniture retail company |
| title_fullStr | The link between debt finance and profitability in the emerging market: A case study of a furniture retail company |
| title_full_unstemmed | The link between debt finance and profitability in the emerging market: A case study of a furniture retail company |
| title_short | The link between debt finance and profitability in the emerging market: A case study of a furniture retail company |
| title_sort | link between debt finance and profitability in the emerging market: a case study of a furniture retail company |
| topic | Debt Finance Financial Risk Profitability |
| url | https://cris.library.msu.ac.zw//handle/11408/5602 https://doi.org/10.22495/rgcv10i4p5 |
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