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http://dx.doi.org/10.14400/JDC.2014.12.6.115

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

Choi, Chang Ho (Dept. of Knowledge Service & Consulting, Hansung University)
You, Yen Yoo (Dept. of Knowledge Service & Consulting, Hansung University)
Publication Information
Journal of Digital Convergence / v.12, no.6, 2014 , pp. 115-123 More about this Journal
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;
Citations & Related Records
Times Cited By KSCI : 1  (Citation Analysis)
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