The Impact of Financial Leverage, Growth, and Size on Profitability of Jordanian Industrial Listed Companies

Abstract

The main purpose of this study is to investigate the impact of  Financial leverage, Company’s Growth , non-current / total assets ratio , and  firm’s Size  as  independent variables on profitability in proxy of Return On Assets ratio (ROA)  as dependent variable. A sample of 25 Jordanian Industrial companies listed on  Amman Stock Exchange(ASE) for a period of 10 years (from 1995-2005) was selected. The results of the research show that there is a significant effect of the Financial Leverage and Growth on profitability of industrial companies. Therefore, industrial companies may enhance the profitability of their firms by minimizing the debt, and increasing financial assets compared with total assets. Therefore, the study concludes some recommendations that are beneficial to the stakeholders.

Keywords: Leverage, Profitability, Industrial companies, Jordan.