Determination of Profit and Loss Sharing Ratios in Interest-Free Business Finance
Abstract
This paper discusses how profit and loss sharing ratios will be determined at the micro and micro levels in an interest free system of financing business operating side by side of an interest based conventional financing.It shows that leverage magnification of return on owners' equity is also available under the Islamic financing. It argues that for the bank Islamic finance may be more profitable than conventional financingDownload Info
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 3013.
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Date of creation: 1985
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Publication status: Published in Journal of Research in Islamic Economics 1.3(1985): pp. 13-29
Handle: RePEc:pra:mprapa:3013
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Related research
Keywords: Profit sharing; macro level model; mico model; leverage effects; relative profitability;Find related papers by JEL classification:
- E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
- D49 - Microeconomics - - Market Structure and Pricing - - - Other
- D40 - Microeconomics - - Market Structure and Pricing - - - General
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Hasan, Zubair, 1991. "Comments on Mohsin S. Khan and Abbas Mirakhor, The Financial System and Monetary Policy in an Islamic Economy," MPRA Paper 3183, University Library of Munich, Germany.
- Hasan, Zubair, 2008.
"Islamic banks:Profit sharing, equity, leverage lure, and credit control
[Islamic banks:Profit sharing, equity and credit control]," MPRA Paper 30392, University Library of Munich, Germany, revised Oct 2008.
- Hasan, Zubair, 2008. "Islamic Banks: Profit sharing, equity, leverage lure and credit control," MPRA Paper 11737, University Library of Munich, Germany, revised Nov 2008.
- Giorgio Gomel & Angelo Cicogna & Domenico De Falco & Marco Valerio Della Penna & Lorenzo Di Bona De Sarzana & Angela Di Maria & Patrizia Di Natale & Alessandra Freni & Sergio Masciantonio & Giacomo Od, 2010. "Islamic finance and conventional financial systems. Market trends, supervisory perspectives and implications for central banking activity," Questioni di Economia e Finanza (Occasional Papers) 73, Bank of Italy, Economic Research and International Relations Area.
- Hasan, Zubair, 2009. "Profit sharing ratios in mudaraba contract revisited," MPRA Paper 21843, University Library of Munich, Germany, revised 2010.
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