Financial leverage and profitability of dairy companies in Ecuador
DOI:
https://doi.org/10.29076/issn.2528-7737vol19iss50.2026pp93-108pKeywords:
financial leverage, profitability, dairy sector, financial indicatorsAbstract
The objective of this research was to determine the relationship between financial leverage and the profitability of companies in the dairy sector in Ecuador between 2019 and 2023. To conduct the study, a sample of 19 companies were taken that met the established requirements, i.e., they had submitted financial statements for the last five years. These companies were classified according to the segment to which they belonged, i.e., small, micro, medium, and large. The data were collected from the website of the Superintendency of Companies, Securities, and Insurance and processed in analysis sheets for the application of financial indicators. The study incorporated two variables, financial leverage defined as an independent variable and profitability as a dependent variable, which showed a correlation of 0.438 with ROE and 0.454 with DUPONT. Financial leverage showed high levels, above 100% during the study period, especially in micro-enterprises during 2023. In other words, most assets were covered by third-party debt or self-financing, i.e., by shareholders. Profitability, on the other hand, increased gradually over the years, due to adequate resource management and cost reduction, especially in small and medium-sized enterprises. However, the segment most affected was that of large and micro-enterprises, as they were unable to recover from the global pandemic. Despite the risk posed by high levels of leverage, conscious investment was one of the key factors enabling companies to survive over the years. In conclusion, it was determined that companies in the dairy sector have a relationship between financial leverage management and the profitability they achieve.
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