<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>Profitability is substantial for any firm to maintain business and enable long-term sustainability. Firms’ decision on indebtedness and capital structure have influence on potentials for prosperity, growth, and development. This study aims to find a new empirical evidence on the influence of debt (debt ratio and debt to equity ratio) on firm profitability (ROA), with application to 50 non-financial firms with highest revenues in Serbia in 2019 during 2016-2019 using multiple ordinary least squares regression model. After control for size, liquidity and tangibility of assets, the results find statistically significant correlation and negative influence of debt ratio and capital structure on firm profitability.</p>
</abstract>

Profitability is substantial for any firm to maintain business and enable long-term sustainability. Firms’ decision on indebtedness and capital structure have influence on potentials for prosperity, growth, and development. This study aims to find a new empirical evidence on the influence of debt (debt ratio and debt to equity ratio) on firm profitability (ROA), with application to 50 non-financial firms with highest revenues in Serbia in 2019 during 2016-2019 using multiple ordinary least squares regression model. After control for size, liquidity and tangibility of assets, the results find statistically significant correlation and negative influence of debt ratio and capital structure on firm profitability.

Impact of Debt Management on Profitability of Large Non-Financial Firms in Serbia

Economic Themes

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Profitability is substantial for any firm to maintain business and enable long-term sustainability. Firms’ decision on indebtedness and capital structure have...

Impact of Debt Management on Profitability of Large Non-Financial Firms in Serbia

Published Online: May 09, 2022

Page range: 461 - 477

Received: Apr 28, 2021

Accepted: Nov 17, 2021

DOI: https://doi.org/10.2478/ethemes-2021-0026

Keywords
total debt, capital structure, firm profitability in Serbia

© 2021 Ivana Milošev, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Impact of Debt Management on Profitability of Large Non-Financial Firms in Serbia

Published Online: May 09, 2022

Page range: 461 - 477

Received: Apr 28, 2021

Accepted: Nov 17, 2021

DOI: https://doi.org/10.2478/ethemes-2021-0026

Keywordstotal debt, capital structure, firm profitability in Serbia

© 2021 Ivana Milošev, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
total debt, capital structure, firm profitability in Serbia