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The Impact of Financial Leverage on the Financial Performance of the Firms Listed on the Egyptian Stock Exchange

Author

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  • Abd-Allah Mustafa Hussein

    (Sadat Academy for Management Sciences, Cairo, Egypt)

  • Ahmed Basma Mohamed Mohamed

    (Sadat Academy for Management Sciences, Cairo, Egypt)

  • Ibrahim Rofida Abdelaal Ahmed

    (Sadat Academy for Management Sciences, Cairo, Egypt)

  • Mohamed Nashwa Alaa Ali

    (Sadat Academy for Management Sciences, Cairo, Egypt)

Abstract

The purpose of this paper is to examine the impact of financial leverage on the financial performance of the 19 firms listed on the EGX30 index in the Egyptian Stock Exchange (EGX) from January 2019 to October 2023. This study used Total Debt-to- Total Assets and Total Debt-to-Total Equity as proxies for financial leverage, while Return on Assets (ROA), Return on Equity (ROE), Earnings per Share (EPS), Asset Turnover Rate, Sales Growth, and Net Profit Margin were used as measures of financial performance. The results showed that there is no effect of financial leverage on return on assets, return on equity, Net Profit Margin and Earnings per share, whether using the Total Debt-to-Total Assets or the Total Debt-to-Total Equity. Regarding asset turnover, the results showed a statistically significant effect on the debt-to-equity ratio, but none on the debt-to-assets ratio. The results also showed that the Total Debt-to-Total Assets ratio and the Total Debt-to-Total Equity ratio have a statistically significant effect on sales growth.

Suggested Citation

  • Abd-Allah Mustafa Hussein & Ahmed Basma Mohamed Mohamed & Ibrahim Rofida Abdelaal Ahmed & Mohamed Nashwa Alaa Ali, 2026. "The Impact of Financial Leverage on the Financial Performance of the Firms Listed on the Egyptian Stock Exchange," WSB Journal of Business and Finance, Sciendo, vol. 60(2), pages 38-49.
    • Handle: RePEc:vrs:wsbjbf:v:60:y:2026:i:2:p:38-49:n:1004
    DOI: 10.2478/wsbjbf-2026-0012
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