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A study on the Debt's Janus-Faced reality as a Way of Capital Finance

자본조달 수단으로써 부채의 양면성에 관한 연구

  • Choi, Chang Ho (Dept. of Knowledge Service & Consulting, Hansung University) ;
  • You, Yen Yoo (Dept. of Knowledge Service & Consulting, Hansung University)
  • 최창호 (한성대학교 지식서비스&컨설팅학과) ;
  • 유연우 (한성대학교 지식서비스&컨설팅학과)
  • Received : 2014.03.11
  • Accepted : 2014.06.20
  • Published : 2014.06.28

Abstract

The first, this study analyzed empirically the effects of net profit on sales, total asset turnover and debt ratio on return on equity, the second, verified debt' s mediating effect on return on investment and return on equity and finally, tested the effect of adjusted debt ratio on return on equity in the small medium sized enterprises. Generally speaking, using debt has a positive effect on return on equity. Meanwhile, using debt accelerate return on equity through leverage effect in the quadric function curve model. Eventually, using debt has a positive and negative effects on return on equity. Accordingly, because of the debt' janus-faced reality, using debt is restricted within the level that operating cash flow(or return on asset) excess interest(or rate of interest).

Keywords

small and medium sized enterprises;debt ratio;interest;return on asset;return on equity;financial consulting

Acknowledgement

Supported by : 한성대학교

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