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The effect of financial leverage on the firm’s performance \\ GP \\ DR \ Hazem Yassin ( 2018- 2019 )

By: Abdelrahmankhaledkhattab 152225.
Contributor(s): Ahmed Adel 152001 | Salma Hazem Ragaai 154329 | NourhanSherif 154301 | Taha Ahmed Mahmoud 154677.
Material type: materialTypeLabelBookSeries: MANAGEMENT DISTINGUISHED PROJECTS 2018. Publisher: Giza MSA 2018Description: 86 Page.Subject(s): AccountingOnline resources: Full text click here Summary: This research set out to investigate the impact of financial leverage on firm performance of the food and beverage sector companies listed in the Egyptian stock market exchange .The financial leverage measurements are debt ratio and debt to equity ratio, firm’s performance measurements which are free cash flow and Tobin’s Q. The researchers are going to examine whether there is a positive or a negative relationship between the two variables and if it is significant or not significant relationship. It took performance measures in a wider perspective using Free Cash Flow and Tobin’s Q. In addition to financial leverage the study expanded its explanatory variables by controlling for debt ratio, and debt to equity. The results revealed that there is a significant negative relationship between leverage and free cash flow. Findings from the Tobin’s Q model indicated that large firms have a negative insignificant relationship between financial leverage and firm performance while the older firms showed an increase in its market value; this is an indication of investors’ confidence on the older firms who have built their reputation over a long period.
List(s) this item appears in: Management Distinguished Graduation Projects Fall 2018 / 2019 | Management Distinguished Graduation Projects - Year 2017 / 2018
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Distinguished Graduation Projects Distinguished Graduation Projects Soft Copy located on library Cataloge GP157MGT2018ACC (Browse shelf) Available 81963

This research set out to investigate the impact of financial leverage on firm performance of the
food and beverage sector companies listed in the Egyptian stock market exchange .The financial
leverage measurements are debt ratio and debt to equity ratio, firm’s performance measurements
which are free cash flow and Tobin’s Q. The researchers are going to examine whether there is a
positive or a negative relationship between the two variables and if it is significant or not
significant relationship. It took performance measures in a wider perspective using Free Cash Flow
and Tobin’s Q. In addition to financial leverage the study expanded its explanatory variables by
controlling for debt ratio, and debt to equity. The results revealed that there is a significant negative
relationship between leverage and free cash flow. Findings from the Tobin’s Q model indicated
that large firms have a negative insignificant relationship between financial leverage and firm
performance while the older firms showed an increase in its market value; this is an indication of
investors’ confidence on the older firms who have built their reputation over a long period.

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