A STUDY OF THE RELATIONSHIP BETWEEN FINANCIAL LEVERAGE AND CEMENT FIRM’S PROFITABILITY IN VIETNAM STOCK EXCHANGE

Abstract

The study measured the relationship between financial leverage and profitability of cement listed companies in Vietnam stock market. Data were collected from the audited annual financial statements of 22 cement firms from 2009 to 2016. Using panel data regression, the results indicated the financial leverage and profitability of firm have relationship. Furthermore, the financial leverage negatively impacts on cement firms’ profitability in Vietnam. The result is significant at the 1% level. The higher financial leverage is, the more profit decline. Besides, the impact of financial leverage on return on assets and return on equity were similar, with no significant difference in the level of impact.